You feel ready to plan your estate, but you have a lot to learn to create a thorough strategy. For instance, what estate planning mistakes should you look out for?
Estate planning helps you take care of your family members and loved ones after your death. Are you familiar with common estate planning blunders that may jeopardize your efforts?
Our leading Albany estate planning lawyers offer tips for avoiding estate planning landmines. Learn from others’ slip-ups rather than make your own.
Not Keeping Your Estate Plan Current
Once you have an estate plan in place, look over it occasionally to ensure that it meets your most current desires. If you move away from New York, your plan must account for your new state’s estate planning laws. A marriage, birth, death or divorce may necessitate a change.
Not Having a Legitimate Estate Plan
Whatever plan you have for your estate, put your desires in a trust or will. Writing your desires on a piece of paper or relating them to a loved one does not keep state succession laws from deciding where your assets go if you die without creating legal estate documents.
Failing to Plan
Minor Heirs and Children
If you have minor children, ensure that your estate plan accounts for their care should you or the other parent die or become incapacitated unexpectedly. Leave detailed instructions for how you want to spend the money you leave minor beneficiaries. Those instructions go to the guardian, the person you want to care for and raise your children if you cannot. Regardless if you designate a close friend or relative as guardian, discuss your decision with the person to make sure that she or he accepts the role.
Long-Term Care or Disability
As you age, you may become disabled or require long-term care in a nursing home. If either scenario happens, you could become buried under a tide of unexpected debt. Plan for incapacitation, disability and long-term care while creating your estate plan.
Not Accounting for Income Taxes
Speak with a financial professional about assets you wish to leave that may incur income taxes for your loved ones. For example, an inherited retirement account may come with required minimum distributions, which may affect a beneficiary’s taxes. Consider shifting a standard IRA into a Roth IRA.
Going About Asset Ownership the Wrong Way
Do you own properties jointly with your spouse? Joint real estate ownership offers transferring and creditor safeguards that make shifting asset ownership more efficient after a spouse’s death. Meet with an estate planning professional to determine the most favorable way to deed real estate property and sidestep gift tax liabilities.
In the coming years, review your estate plan for costly mistakes. A lack of knowledge or preparation may cost you and your beneficiaries and heirs more than you realize. From time to time, consider reviewing your estate and looking for updates!