Most people already know that estate planning is essential for their family members. However, even with the best intentions, you could make a mistake that can have unintended consequences for your loved ones. Sometimes, that can lead to delays and disputes involving the distribution of your estates. Here are a few common mistakes to avoid when estate planning.
Estate Planning Mistakes
When planning your estate, you want to cover every possible scenario. With that, there is no mistake about how your assets are divided after your pass. Unfortunately, you can make mistakes during this process.
Procrastination
One of the most common mistakes people make is delaying the estate planning process. You may believe that you have plenty of time or that estate planning is only for those older people. But that is not true.
Regardless of your age or health, you always want to have a plan in place. Unfortunately, tragedy could happen at any moment. Without a plan, decisions about your assets and estate could be left to the courts. When you start early, you can address all concerns and meet any challenges. Also, that will ensure that your beneficiaries can receive your wealth without issues.
Never Updating the Plan
Life is full of changes. Over the years, you might marry (or re-marry), welcome a new child, or experience a death in the family. All of these changes should be reflected in your estate plan.
Even changes in your financial status are another reason to update any plan. When you fail to do this, your estate will have outdated directions that might not reflect your current wishes and goals for your family.
You might want to review your plan every two to three years and make all necessary adjustments. With that, you can make sure your estate aligns with your intentions.
Skipping Beneficiaries Designation
You need to name someone as a beneficiary in your will, especially if you have a retirement account, bank account, or insurance policy. Without anyone’s name as a beneficiary, it will send the estate to probate, leading to disputes among your family members.
Never assume that your family will work out these issues by themselves. You want to avoid putting the burden on them and causing a disruption in the family dynamic.
Ignoring Taxes
When you have an estate plan, your goal should be to minimize tax liabilities for your loved ones. If you fail to consider gift, estate, or inheritance taxes, that can reduce the value of your estate. In turn, your beneficiaries will receive only part of the monetary amount of your assets.
Working with a legal or financial professional can help you reduce some of that burden. When you address tax implications in the estate plan, you can preserve more assets for future generations.
Not Addressing Long-Term Care
Most people believe estate plans are for end-of-life preparations but fail to consider long-term care. Without making these plans, your medical costs could deplete the estate. You might want to consider creating a trust to hold assets specifically for long-term care expenses or exploring Medicaid planning options to make sure your estate is not exhausted by medical costs.
Be Proactive and Avoid Estate Planning Mistakes
If you want to avoid these common mistakes when estate planning, reach out to the Collins Law Firm. We can assist with estate planning, estate administration, business law, and elder law services.
Our office proudly serves Southeastern Wisconsin and the Milwaukee area. Contact us or call (414) 207- 6292. Schedule your free and confidential consultation today!