Common Mistakes in the Estate Planning Process
Whether you are extraordinarily wealthy or have a modest income, you need to create an estate plan. Creating an estate plan ensures that you will make the determinations regarding your assets after your death, instead of the state. While the largest mistake is not doing any planning for your death, there are several other common mistakes that many people make during the estate planning process.
- Never Updating Your Will or Trust in Writing. Whether your estate plan includes a will, trust, or both, you will need to update it in writing as your life changes occur. Divorces, marriages, and children can all change your wishes for the distribution of your estate. Ensure that these changes are made in writing, and make an official amendment to your will or trust when you want to update any changes to your wishes.
- Choosing a Terrible Trustee. The person you choose to be your trustee for either your will or trust can make the entire process smooth or horrible. You have worked hard your entire life for your estate, and you should choose your trustee or representative of your estate distribution wisely to know that your assets will be distributed accurately and efficiently after your death. Consider any neutral third party that is reliable and trustworthy instead of close friends or family.
- Never Considering Your Own Possible Disability. During the estate planning process, most people are focused on their wishes after their death. However, there is a possibility that you can become disabled. If you are disabled, having a trustee of a revocable living trust may prove more beneficial than having only a last will and testament. Consider your trustee or representative carefully, and also visit with an experienced estate attorney to help you make these decisions.
- Failing to Include a Residuary Clause. Honest mistakes can be made, and assets can be overlooked when creating a will or trust. A residuary clause will address and handle any property or assets that were not directly identified and distributed through the will or trust with overt and specific consideration.
- Failing to Plan for Minors. Leaving your assets to minors after your death can be exceptionally challenging, and there may be more of a benefit to establishing a trust instead of a will for these cases. To ensure that your minor beneficiaries receive your estate after your death according to your wishes, you may want to visit with an experienced attorney.
- Failing to Address the Inevitable Income Taxes. The only sure things in life are death and taxes. The assets of your estate after your death is no exception. There is a good chance they will be subject to state and federal taxes. hey say that all that is sure in life is death and taxes. Your estate may be subject to either state or federal income taxes, or both. Protecting your estate from tax liabilities as much as possible is important and can be discussed with an experienced estate planning attorney.
- Incorrectly Titling Assets. If you have more than one beneficiary, then titling them correctly can become complex. Complicated legal issues such as joint tenancy, and joint ownership with survivorship rights can be difficult to navigate and ensure that all assets are titled correctly.
- Underfunding a Living Trust. If you have a living trust as part of your estate, you must fund it correctly while you are alive. Failing to do so can make the entire estate go through a probate process, which a trust is created to avoid.
- Poor Communication. While a will and/or trust will convey your wishes after your death, it is always a good practice to notify the parties that are involved and will be the beneficiaries of your wishes. They will be on notice and then be able to ensure that your wishes are fulfilled after your death.
- Failing to Visit with an Attorney. The most common mistake is not meeting with an experienced estate planning attorney. Ensure that your estate will be distributed according to your wishes by contacting the experienced Scranton estate planning attorneys at the Needle Law Firm at 570-344-1266 or online today.