Some people assume that an estate plan is something that only very wealthy people need to do as they age. However, if you have anything of value that you plan on leaving to loved ones after you pass, then you and your loved ones could benefit from you having a dedicated estate plan. As you work out your estate plan, however, there are some common mistakes you'll want to be careful to avoid.
Failing to Keep an Updated Will
Understand that an estate plan and a will should go hand-in-hand; in order for your estate plan to be carried out as per your wishes, you will need to have an updated will as well. Don't neglect the importance of updating your will as you work on your estate plan or forget to update it altogether, as this will create a headache for your loved ones later on.
Not Making Gifts a Part of Your Plan
When it comes to executing your estate plan, you'll want to do your best to avoid leaving your loved ones with hefty taxes on the property or money they receive. Therefore, you'll want to take advantage of your ability to "gift" to your loved ones tax-free, up to a certain dollar amount (this varies depending on your beneficiary). The last thing you want is to further complicate a loved one's life with the execution of your estate plan.
Failing to Plan for a Disability
Understand that a death is not necessarily the only situation in which you may need an estate plan. For serious disabilities, a well thought-out and executed estate plan can also come in handy, so be sure to plan accordingly. This might mean making sure you have a power of attorney appointed in the event that you become disabled and unable to make financial and other decisions for yourself.
Not Transferring Your Life Insurance
When you implement your estate plan, you'll also want to make sure you have a plan in place to transfer your life insurance policy to a life insurance trust. This way, when it comes time for your beneficiaries to be paid out, they can be sure to retain as much of their benefits as possible and lose less of it to taxes.
Waiting Too Long to Draw Up a Plan
Last but not least, don't put off drawing up an estate plan; the sooner you get the ball rolling, the better off you and your loved ones will be (and the greater the peace of mind you'll enjoy in the process). Contact an estate attorney, like Cormac McEnery, for help.
Share9 September 2015
While I took a few business classes in college, I left early to start my own business. I thought I had the knowledge I needed to become a great business owner and was eager to start my business. Soon, I had a new business that was actually performing pretty well in sales. Unfortunately, I hadn't taken any law courses in college, and I soon realized I made a few mistakes when starting my business that could cause me some legal trouble. Thankfully, a great business lawyer helped me correct my mistakes before I had any legal problems, but I then decided to take those business law courses. I want to help business owners and anyone else who would like to learn more about the law by starting a blog where I will share what I have learned and will continue to learn. I hope I can help you!