Estate planning isn’t only for the wealthy. The reality is that estate planning is important for everyone, regardless of how many assets you own or your marital status. Estate planning is the process by which an individual or family arranges the transfer of assets in anticipation of death. Estate planning allows you to avoid the time and costs of probate for assets you solely own in your name at the time of your passing. Estate planning also includes benefits, such as, allowing you to name guardians to care for your minor children, reducing estate taxes, and protecting your assets from unforeseen creditors.
Here are five common estate planning mistakes to avoid.
- Not updating your will. Many life changes can take place within a family or business structure, such as births, deaths, divorces, and new property acquisitions. If you rely on an outdated will, you may not be leaving your assets to those you intend. You should always perform a periodic update of your will when these life changes take place.
- Failure to Protect a Disabled Beneficiary. If you have a disabled beneficiary, such as a handicapped child, you should consider leaving them their inheritance in a specially-drafted trust to protect your child and keep them eligible for public assistance. Without public assistance, many such children would have to spend their entire inheritance within a few years on medical and other needs.
- Putting your children’s name on the deed. When you place your children’s name on the deed to your home, your children become co-owners of the property with you. This, unfortunately, results in a federal taxable gift under IRS regulations, as well as a state taxable gift. Additionally, if your child has any pending lawsuits against them, is going through a divorce or has a tax lien filed against them, you may soon own the house with your child’s creditors as well.
- Choosing the wrong person to handle your estate. The executor of your estate is responsible for carrying out your wishes by locating, managing and distributing your estate’s assets. Many people do not realize what a time-consuming role this can be, taking anywhere from months to years to complete. Many people often choose a family member for this role. However, you should consider a professional with financial or legal expertise, who is not as personally invested and can objectively handle the extensive duties and demands required.
- Not meeting with an experienced legal tax professional. An estate planning attorney will help you consider all the various pieces of your legacy and the legal documents you need to have in place. An experienced tax attorney can provide you with tax-planning strategies based on the particular needs and demands of your estate.
Contact An Experienced Estate Planning Attorney Today
Regardless of how many assets you own, estate planning is essential to protect you and your loved ones. To schedule a Free Phone Consultation and case evaluation, please call our office today at 404-937-1414. You may also schedule a consultation online.