Most people view estate planning in the same way they view a root canal: Put it off until the pain is too great to ignore any longer. Also, those with little income or net worth believe that estate planning doesn’t apply to their situation. But estate planning is much more than just the allocation of cash, real estate, and other assets. There are other things to consider, too.
There are many errors that occur again and again in estate planning. Avoiding these mistakes is half the battle.
Steer clear of these mistakes for a successful estate plan:
1. Estate planning is a little like completing a tax return. No one really wants to do it. But it’s so important to push your resistance aside and get it done!
2. Not paying attention to the conflicts that exist within your beneficiaries and estate plan. For example, if your will declares that your husband receive your retirement account, but your ex-husband’s name is still listed as the beneficiary, this could prove to be a big challenge.
3. Not using the unified credit to your advantage. This only applies to those with a significant net worth, but this mistake is made regularly. In most cases, assets pass to the surviving spouse. Up to $5,250,000 can be excluded from taxation.
4. Not having adequate life insurance. Life insurance can be a great estate-planning tool for the affluent, but life insurance is vital to those with low income as well.
5. Creating a plan that lacks flexibility. Creating a plan with a little wiggle room will allow your heirs to take advantage of any new laws as well as use the assets in the most advantageous fashion.
6. Not gifting assets. Up to $14,000 can be gifted to each beneficiary per year without incurring a gift tax. This can be a great way of reducing the taxes imposed on your estate at the time of your death. You also have the chance to see how well your beneficiaries can manage your assets.
Estate planning isn’t the most enjoyable activity, but it is likely to be one of the most important things you do for your family.
Everyone should have a basic estate plan that spells out their wishes. This is important even if there are no children or assets. An attorney can be invaluable unless your estate is very simple. And even then, the $100+ it will cost to have an attorney take a look at your documents will be money well spent.
Schedule your free consultation with Margaret Webb to discuss your estate planning needs!
Get the insights you need on what to do first and key steps you need to take on various legal issues. Check out all our How-to Kits by clicking the link below.
Join our mailing list to receive our blogs, the latest news and updates from our team. Please note that your information will not be shared.
50
0