Top 5 Estate Planning Mistakes to Avoid
This post was updated on March 25, 2022
Estate planning is something that's easy to ignore until the time comes when an estate plan is essential. You want to make sure your final wishes are carried out. You also want to be certain that you don't make estate planning mistakes.
Drafting a will can be vital even if you don't have many assets. It can help you map out who gets what after you pass on. And it can help your heirs.
So what are some estate planning mistakes you should avoid?
1. Thinking You Don't Need an Estate Plan
It's easy to avoid the subject of estate planning because nobody likes to think about dying. It might be the kind of thing you expect to do "next year." But nobody knows for certain when they will die. There's no telling when tragic accidents or sudden illnesses may strike. It's important to give estate planning serious thought and consider taking the first step soon. It doesn't need to be a big, expensive step. In fact, you might be in a position where you can do the estate plan yourself. If so FindLaw Forms & has the tools you need.
2. Not Considering Disability
You might be in great health now, but there's no telling if your fortunes might change. It's important to consider the possibility of an unexpected disability. Creating a power of attorney or living will makes it easier for others to make health care decisions for you if you are unable to do so.
3. Not Trying To Reduce Your Estate Tax
There are multiple methods you could use to reduce your estate tax burden. One way is to give gifts to your spouse or to your children. Up to $16,000 a year per spouse may be excluded from estate taxes under the IRS code.
4. Forgetting To Update Your Will
Life is a series of changes, and some can have big impacts on your will. New family members, deaths in the family, property purchases, and divorces are the kinds of things that should cause you to review your will when they happen. But it's also a good idea to schedule periodic reviews for potential updates.
5. Deciding Not To Transfer Your Life Insurance to a Trust
Life insurance proceeds are subject to taxes. By creating a life insurance trust, you could avoid taxes on your estate.
Taking Steps Now
Estate planning might be something you'd rather avoid, but it's never too soon to think about helping your family and heirs when you are gone. It doesn't need to be an onerous and expensive task — the right tools of the kind that we offer here at FindLaw Forms & Services can make the task much easier.
Of course, you might also want to consult with an attorney that specializes in estate planning law to discuss your specific situation.
- Estate Planning Tips: Find the Right Estate Plan for You (FindLaw's Learn About the Law)
- Estate Planning Tips for Millennials (FindLaw's Law & Daily Life)
- 5 Things Not to Include in Your Will (FindLaw's Law & Daily Life)
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