Estate planning is a process that allows you to safeguard your assets and make sure they go to your desired recipients after you die. It entails putting wealth preservation plans and tax strategies in place to reduce taxes, court costs, and more, legally.
While the process is an advantageous endeavor to tackle, especially in terms of legacy building, many families or business owners struggle to get started. Some find the idea of end-of-life planning uncomfortable, so they try to avoid it as much as possible. On the other hand, those willing to plan for the end often unknowingly commit estate planning mistakes as they move forward.
Estate planning is a time-consuming and complicated process, however, being aware of the common estate planning mistakes families make will give you a good idea of the blunders that can sabotage your plan. Ultimately, it will help you get on the right path toward building a lasting legacy for your loved ones.
On that note, let’s take a look at these five common estate planning mistakes:
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Not Planning As Early as Possible
As mentioned above, some often find the topics of long-term planning and the event of death difficult to discuss. However, it helps to remember that putting off estate planning because of the uncomfortable discussions that come with it can make things more difficult for you and your family. When you pass away without a will in place, your assets will likely be stuck in probate court — something that your loved ones shouldn’t have to worry about as they mourn.
It’s best to start your estate planning journey as soon as possible. Do not wait for terrifying health emergencies to happen before making a move. The earlier you plan, the more you will be able to protect your legacy and, most importantly, your family.
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Crafting Your Estate Plan on Your Own
Do-it-yourself estate planning is indeed more convenient and relatively less expensive than seeking legal advice. It helps, however, to remember that when you create your wills and trusts from online templates, you’re missing out on the thoughtful and strategic insight that only qualified estate planning professionals can offer.
Estate planning attorneys are also there to guide you through processing your papers properly. As such, tackling this task on your own makes you more prone to executing documents incorrectly, which then renders all your hard work invalid and unenforceable.
It may look like you’ve saved time or money at first, but you’ll eventually find that creating a DIY will put you at risk of facing higher fees and unintended consequences.
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Not Getting Family Members Involved
While we understand that family situations and arrangements differ from one to another, it’s usually a good idea to introduce the estate plan to your family members.
Starting discussions about the assets and other possessions you plan to leave behind gives your family members the chance to ask questions about your will. This consequently helps lessen the possibility of any disagreements or conflicts after you pass away.
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Failing to Properly Fund Trusts
A Trust is another excellent tool you can use to preserve your wealth and smoothly transfer it to your loved ones. However, creating a Trust isn’t the end of the story. You must also ensure that it’s properly funded; otherwise, your assets still won’t avoid probate. In the worst-case scenario, your estate may not be managed and distributed according to your wishes.
When you “fund” your trusts, you are basically transferring your assets’ legal titles to the trust. Once the ownership of your possessions is transferred, the person you’ve named Trustee will now have control of the assets and how they’ll be distributed to your beneficiaries.
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Failing to Review and Update the Plan Regularly
It’s worth pointing out that estate planning is not a one-time endeavor. You will go through different phases as the years pass, so you have to ensure that your will reflects all of those changes.
Whether you’ve experienced marriage, divorce, the birth of a child, the death of a family member, or even a relocation out of state, updating your will accordingly helps ensure your assets and your loved ones remain protected, no matter how things may have drastically changed around you.
Finally, aside from watching out for any significant life event, a great plan is to review your estate plan every three to five years. Consider working with your trusted estate attorney in updating your will, especially if public policies relevant to it have changed.
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Do Estate Planning the Smart Way With Wiles Law
Creating an estate plan allows you to safeguard your loved ones’ future even after you are gone. Since it’s a complicated process, it helps to know the most common estate planning mistakes families unknowingly make. Awareness of these missteps can help you ensure that your preparations and good intentions today will translate to lasting benefits for your family tomorrow.
Aside from knowing what slip-ups to avoid, seeking the help of a qualified estate planning attorney is a surefire way to get on the right path toward legacy building. Having knowledgeable and dedicated professionals guiding you through the estate planning process empowers you to craft a plan that ensures your heirs thrive and your legacy survives.
If you are ready to do estate planning the smart way, Wiles Law is here to help. As a full-service estate, tax, and business planning law firm, we can help you find the best wealth preservation and tax strategies for your needs and goals. Contact us today to take the next step.