Avoiding the Common Mistakes of Estate Planning
Are you planning your future? One of the best ways most critical steps in planning your future is to make sure that your loved ones are provided for and that their lives are easy – which means planning for the eventuality of your death – otherwise known as estate planning.
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The first step in estate planning is to work with a qualified estate planning attorney. It doesn’t matter what the size of your estate (savings, investments, or personal property) is – without estate planning, the state can choose how to distribute your estate. This means the people you care about won’t have any say in what they receive or how your estate is distributed. The rights of your loved ones aren’t protected, or their financial security.
Estate planning can be an incredibly complex task, especially with the many different tax laws that apply to estates. When you work with an estate planning attorney, you find out how you can protect your assets so your family receives more in the event of your death.
Unfortunately, a lot of people try to save money by doing their own estate planning. This often leads to a number of very costly mistakes.
The first mistake, of course, is not having estate planning at all. In addition to the tremendous stress of losing a loved one, you could be facing your family the complications of having to figure out how to pay for funeral expense, mortgages, college, or even simply daily living expenses. An estate attorney will generally recommend either that you create a will or a living trust. Your estate may also include granting power of attorney or establishing guardianship for children.
The next mistake involves an unclear understanding estate taxes and the effect they have on your estate. It’s not uncommon for estates to be reduced by as much as 30% or more for estate taxes. Your attorney can explain estate tax and inheritance tax, and give you guidance on how to avoid taxes and how to keep your estate relatively intact.
Another common mistake is not planning for incapacitation or medical emergencies. Many people have strong feelings about how they would want to live their lives if injured or seriously ill. It’s extremely difficult for loved ones to make medical decisions; a health care directive makes it easy for loved ones and keeps them informed about what you would want.
When you consult with a probate and estate attorney, you can avoid some of the costly and frustrating mistakes that will cause your loved ones difficulty and frustration. A good probate and estate planning attorney will help you determine the best method for planning your estate and protecting your loved ones.