More Common Estate Planning Mistakes
In the last post we looked at five mistakes people make when estate planning. These included not having a plan as well as trying to “do it yourself” using documents you can find online. When it comes to something as important as planning what happens to your assets when you are no longer around, you want to make sure you are creating a valid and comprehensive document that is going to protect your loved ones and carry out your final wishes.
Common Estate Planning Mistakes | Lawyer in Raleigh NC
- Most people don’t consider the taxes that will have to be paid in order to settle their estate. It’s important to leave enough liquid assets available to cover taxes such as federal state taxes, state death taxes, plus federal and state income taxes. It’s also important to factor in the fact that life insurance policies could still be subject to the federal estate tax. Most people don’t realize that their beneficiary can be taxed for it.
- People who have created trusts in their estate planning often forget to fund it. Failure to fund a trust means the assets will have to go through probate process, or they will go to the last person designated on the account or policy. That means that the wrong person could end up with the assets. The reason for creating a trust in the first place is to avoid probate and to ensure that the right person is on the receiving end.
- A completed estate plan is not a final document that cannot be changed. It is important to make changes when major life events occur. People often forget to make updates when there are changes such as a birth or death, a divorce, or a change in ownership of assets. It is good practice to review your documents with your attorney at the end of each year to make note of any changes.
- An estate plan cannot be put into effect upon your death if it cannot be found. Don’t make the mistake of putting it somewhere and not telling someone such as your spouse or attorney where it is. If you place it in a safe deposit box at a bank, a court order may be needed in order to access it. You can keep it at home in a fire safe cabinet, or ask your attorney to keep a copy.
- While your estate plan can be changed, make sure changes are not made during times of crisis. If you have spent a good deal of time creating a thoughtful, detailed plan for your assets but then get angry at someone, do not be tempted to “cut them out of the will” for a minor transgression. It is also important not to make changes that can cause legal or tax problems down the road.
Now that you’ve learned ten of the most common mistakes people make during the estate planning process, you can try to avoid them. Working with a lawyer in Raleigh NC who knows about estate planning can make the process easier. You can be confident that your documents are accurate and reflect current regulations and tax laws.
If you don’t have an estate plan in place or haven’t reviewed yours in several years, now might be the best time to start. Our lawyer in Raleigh NC is here to help you get your estate planning in order and ready should you pass in an untimely manner or become incapacitated at some point. It’s better to be safe than sorry when it comes to an estate plan. Contact our lawyer in Raleigh NC to get started estate planning, today.
As always, feel free to contact us with any questions or concerns you may have about estate planning. Also contact us to schedule a consultation if you have yet to start estate planning. It's never too early to make plans for your wishes upon death. In addition, our attorney is here to help you with all your legal matters, whether it be estate planning, small business, trademarking, copyrighting, or DWI issues.
