Estate planning is highly important even though few people plan accordingly. For instance, most people do not even have wills which are essential components of estate planning. That said, here are estate planning mistakes you need to avoid:
Failing To Plan
It is common for many estate owners to leave all their planning to estate planners. Estate owners have a tendency to trusting estate planners to fulfil everything that is on the estate plan. In the same way, estate planners often assume to read the estate plans and simply sign them without an understanding of the content. This greatly impedes the full implementation of these plans as there is a lack of accountability. To avoid making this mistake, the estate planners at the Atlanta estate law centre recommend that you involve an estate planning attorney in Atlanta to help you understand everything in the plan and how it should work. Your attorney can also help you understand what you should implement to maintain the contents of the plan so that it works for you and your beneficiaries.
In the presence of your attorney, your estate plan can take you through the entire plan and all its documentation before you sign it so that you can hold the planners accountable in case they fail to fulfil the plan religiously. Your lawyer can also advise you on the importance of writing a trust or will otherwise the government can interfere with your plan by distributing your assets to a guardian especially if your children are below eighteen years of age. Your lawyer can help you develop an ideal will so that you are sure your children will benefit after you die. Your lawyer can also help you understand the respective estate governing laws in your country which govern the distribution of assets to the spouse and children. With a written estate plan guided by an attorney, you can avoid these inconveniences and have your finances shared as per your interests.
Failure To Plan For Estate Tax Liability
You must understand the estate governing laws of your respective country. Understand whether, in your country, the estate tax law imposes taxes upon the transfer of the estate to the beneficiaries after death. Also understand whether or not you are excluded from your state taxes so that if you are liable for taxation, you remit your taxes accordingly to avoid confrontations with legal entities. You can reduce liability and make informed decisions regarding your plan before you die. Remember that for your beneficiaries to retain tax deferrals, their account details must be worded accordingly to ensure they are regarded as see-through trust. Know when to refer to the individuals you name in your plan as beneficiaries and when to regard them as trusts as they both have different implications which can affect your plan. Your estate attorney can also help you understand the meaning of these legal terms and advise you on how to use them appropriately to your benefit and the benefit of those you love.
Failure To Update Your Estate Plan
Anytime there are changes in your family structure and membership and anytime there is a change in your business structure you need to update your estate plan. Common factors that may prompt you to update your estate plan include; birth, death, divorce, relocating to another state/country, and property acquisition. When faced with either of the above or all of the above, you must update your plan so that it complies with your interests. Change your will accordingly too. You should also update your list of beneficiaries while adhering to the details in the beneficiary designation forms. Ensure you understand the details of every designation form as this is what determines who inherits what assets after your death.
Update the beneficiaries of your retirement accounts, your life insurance policies, and your annuities. Remember that when you fail to update your beneficiary designation status, an asset can end up going to your siblings or parents because that is what you indicated on the form when you first opened your account. Your assets can also end up awarded to your ex-spouse, unintended beneficiaries, and at times to the estate of a deceased individual if you fail to include such details in your forms. You can also have a child excluded inadvertently probably because one was not born or was not married into your family at the time you were completing the designation forms. Make it a habit to review your beneficiary designations every three years to avoid any inconveniences to your loved ones when you shall be long dead and unavailable to explain what should happen.
The common estate planning mistakes you need to avoid include failing to update your designations, failure to update your asset ownership, failure to plan and understand the plan, not adhering to estate taxes, failure to understand when to put other names on your deed, and not transferring life insurance policies to your target benefactors. Some people also fail to fund the revocable trusts and this still affects the way your assets are shared and the taxation policies too. It is crucial that you have an estate attorney to guide you on how to maintain your plan for the benefit of your loved ones after you die. Remember to update the powers of attorney too.