Many believe that estate planning is something done by people with big estates. However, an experienced and knowledgeable estate law attorney can provide invaluable guidance for passing money, assets and other things to beneficiaries while legally minimizing or eliminating tax obligations. A good plan also enables clients to plan for such eventualities as death as well as how to address such potential issues as incapacitating illness. It is worth noting that estate planning is something that is created and then updated as priorities change and issues present unexpected challenges.
Six common mistakes
The details of each estate are different, but here are some common errors from a longer list that can be avoided:
- Forgetting key elements: Things fall through the cracks and are forgotten; this is one important reason why it is best to update an estate plan regularly.
- Keeping it a secret: Some do not like talking about money or find the idea of dying too uncomfortable to discuss, but it is wise to share your plans, so benefactors know what to expect and what needs to be done.
- Not planning for disability: Debilitating illness can have a significant impact on finances and leave families at a loss for what decisions should be made on your behalf.
- Not gifting money: Gifting less than $14,000 ($28,000 per couple) is a simple way to transfer money tax-free to beneficiaries annually, and it can have a positive impact upon the lives of loved ones as well.
- Putting a child’s name on the home’s deed: Because the home is worth more than $14,000, it becomes a taxable gift. It is better to pass a house through inheritance.
- Choose the wrong executor: Blood relatives are important, but some do not have the ability or the interest in handling the details involved in going through probate or closing an estate.
Procrastination is not a friend
It is easy to put off estate planning for a rainy day or avoid it altogether. Doing this puts a tremendous amount of stress on loved ones and beneficiaries, which can then lead to disagreements. An attorney with experience creating estate plans and helping families through the probate process can be invaluable to those going through the grieving process. These legal professionals can also help clients and families efficiently address issues as they arise.