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Introduction
While making an estate plan, there are mistakes people commonly end up making because of ignorance or misinformation, and the secret to avoiding these mistakes is knowing them. The following are top 10 common estate planning mistakes people make and how to avoid them.
Top Mistakes To Avoid In Estate Planning
1. Thinking that estate planning is only for the rich and famous
Many people hold this belief and so leave estate planning because they have only one or a very few assets to their name. Even a car, bank account, or house will have to pass down to a beneficiary, and so there is need to state who you want to be the beneficiary. If not, it may end up in the hands of someone undeserving of it.
2. Only planning for after death situations
Many people think estate planning is only about how your property gets disbursed after your death and so fail to plan for disability, mental incapacity, tax avoidance and end of life situations. One may be rendered incapable of running their own business due to illness, accident or sudden disability. A person has to be appointed to run the business, and this appointment is made by creating a durable power of attorney in the owner’s estate plan.
3. Forgetting to update beneficiary designations
Beneficiaries in your wills and trusts have to be consistent with those on your insurance and retirement accounts. A person might create a will, name a beneficiary of his insurance policy, and forget that there is a different beneficiary already on the insurance policy. If that in the will is what you want, then you have to make it the same as what’s in your insurance policy as well. Insurance policies and retirement accounts go to the designated beneficiary and not what the will says.
4. Failing to update your plan
Many things might require you to update your plan. Acquiring new assets, having new kids or loved ones, or moving to a new state. In as much as estate laws change from state to state, there is need to update your estate plan when you move to a new state. Separation, divorce and remarriage may also require you updating the beneficiaries in your will.
5. Naming a minor as a beneficiary
Minors (children under the age of 18) are never allowed by law to inherit property. If you have a minor, ensure you appoint a guardian in your will.
6. Not planning for probate avoidance
Probate can get very complicated and burdensome for the surviving family especially when the deceased owned property in multiple states. In addition to a trust, an experienced estate planning lawyer can proffer means by which probate can be avoided.
Top Mistakes To Avoid In Estate Planning
1. Thinking that estate planning is only for the rich and famous
Many people hold this belief and so leave estate planning because they have only one or a very few assets to their name. Even a car, bank account, or house will have to pass down to a beneficiary, and so there is need to state who you want to be the beneficiary. If not, it may end up in the hands of someone undeserving of it.
2. Only planning for after death situations
Many people think estate planning is only about how your property gets disbursed after your death and so fail to plan for disability, mental incapacity, tax avoidance and end of life situations. One may be rendered incapable of running their own business due to illness, accident or sudden disability. A person has to be appointed to run the business, and this appointment is made by creating a durable power of attorney in the owner’s estate plan.
3. Forgetting to update beneficiary designations
Beneficiaries in your wills and trusts have to be consistent with those on your insurance and retirement accounts. A person might create a will, name a beneficiary of his insurance policy, and forget that there is a different beneficiary already on the insurance policy. If that in the will is what you want, then you have to make it the same as what’s in your insurance policy as well. Insurance policies and retirement accounts go to the designated beneficiary and not what the will says.
4. Failing to update your plan
Many things might require you to update your plan. Acquiring new assets, having new kids or loved ones, or moving to a new state. In as much as estate laws change from state to state, there is need to update your estate plan when you move to a new state. Separation, divorce and remarriage may also require you updating the beneficiaries in your will.
5. Naming a minor as a beneficiary
Minors (children under the age of 18) are never allowed by law to inherit property. If you have a minor, ensure you appoint a guardian in your will.
6. Not planning for probate avoidance
Probate can get very complicated and burdensome for the surviving family especially when the deceased owned property in multiple states. In addition to a trust, an experienced estate planning lawyer can proffer means by which probate can be avoided.
Contact Info
Address:
435 Hudson St
New York
NY 10014
United States
New York
NY 10014
United States
Tel:
646-693-0388
Website:
http://estateplanninglawyersny.com/
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