4 Estate Planning Mistakes To Avoid At All Costs
Estate planning is something that ever adult should do, but there are many people who do not understand all that is involved in a comprehensive estate plan. If you are in need of planning your estate, you should ideally work with an experienced estate planning attorney. The last thing you want to do is make major mistakes when it comes to estate planning. Some of the most common estate planning mistakes include:
Failure to Update Your Will
Many people have a will drawn up and then forget about it. But a will should be considered a fluid document that needs to be updated throughout your lifetime. Divorces, births, deaths, acquisitions of new assets/properties, and changes to business structure are all causes for an update to a will. If you fail to update your will when there are major life changes, your family can face issues with your estate after your death.
Not Planning for Physical or Mental Incapacitation
Your estate plan needs to encompass more than just your finances. Another important part of an estate plan is making decision regarding what will happen if you are physically or mentally incapacitated and can no longer make your own decisions. You will need to name a power of attorney who you trust to make decisions of your behalf regarding finances and your medical care. Your power of attorney should be someone who who trust completely and can rely on to carry out your wishes.
Adding Your Child's Name to the Deed of Your House
Many people intend to pass on their home to a child after their death, and some believe that the best way to do this is by adding his or her name to the deed of the house. In reality, this is actually a bad idea since your child will face a high estate tax bill after your death. Instead of adding your child to the deed of your home, consider placing your home in a trust so your child can inherit it without any tax issues.
Choosing the Wrong Executor
The executor of an estate is responsible for handling all of the details involved in settling an estate after a person passes. You may assume that your spouse or a child is the best choice for an executor, but this is not always the case. If you have a complicated estate, you may want to choose someone outside of your family, such as an attorney, to serve as your executor.
Contact a law firm, like Abom & Kutulakis LLP, for more help.