Common Estate Planning Mistakes

It can be a relief to finally get your affairs in order, but keep in mind these common estate planning mistakes that are all avoidable with the right knowledge.

1. Not having an estate plan at all.

The worst thing you can do is nothing at all. If you die without a will, the state will decide who inherits your assets through probate court. In the absence of an heir, whatever you own becomes the property of the state. It’s especially important to name a guardian for your children, if you have any.

2. Your plan is out-of-date

Don’t create your will and then forget about it. Major life changes will require updates to your will, such as buying a new home, a birth, death, marriage, or divorce. Get in touch with your estate planner if your finances or life circumstances change. 

3. Not planning for disability

Not preparing for illness is a common estate planning mistake because no one wants to consider the possibility of being sick or injured. But it’s important to decide who would handle your finances and make healthcare decisions on your behalf in the event that you were unable to advocate for yourself.

4. Putting your child’s name on the deed

If you put your child’s name on the deed to your home, it becomes a gift that is subject to taxation. The alternative is to pass real estate to your child through their inheritance. Note, however, that gifts valued at less than $14,000 are excluded from this estate tax.

5. You aren’t too youngDon’t make the estate planning mistake of waiting until you’re older. It’s true that your needs will change as you age, but if you have a family or assets, it’s best to settle your affairs sooner rather than later. Plans can and should be updated down the road.

6. Reduce your estate tax through gifts

 A common estate planning mistake is failing to reduce estate taxes through gifts. These gifts can be made to individuals, organizations, or businesses of your choosing.  

7.  Forgetting the family pet

With everything else to consider, don’t forget to plan for your pets. It’s not only possible to establish a trust for your children, but for animals, as well. This is one way to ensure funds are available for their continued care. The last thing you’d want is for furry family members to end up in a shelter where they might be euthanized.

By preparing now, you make important decisions that affect your loved ones, instead of leaving things to federal and state governments. For more information on avoiding common estate planning mistakes, please contact us at Lewman Law to discuss your needs, and how we can help.