An estate plan is the way that you can let your loved ones know what you want to happen to your assets when you pass away. This isn’t an easy thing to think about, but it’s necessary. There are numerous mistakes that people make when they’re creating an estate plan if they don’t have legal guidance.
Being able to avoid mistakes can help your estate plan be followed as intended. It can also help to ensure that your loved ones get what you intend for them to have. Let’s look at a couple of serious but all-too-common mistakes you want to avoid.
Failing to pay down the estate
If you have a high value estate, you need to do what you can to ensure your loved ones won’t lose out on too much of it because of taxes. One way you can do this is to pay down the value of the estate so it doesn’t pass the threshold for taxation. There are limits to how much you can gift annually, so be sure you’re in compliance with those limits if you gift a significant amount of money or other assets to family members while you’re still around.
Failing to review the plan
Once you create your estate plan, you can’t just forget about it. Instead, you need to review it periodically to ensure it still reflects your wishes. You also need to review it when you have something major happen in your life, such as:
- Getting married or divorced
- Having children
- Buying or selling assets
- People named in the plan passing away
- Moving to a new state
Creating your estate plan can help to give you peace of mind and lets your family members know what to do when you pass away. Making sure that it’s set up in a way that’s legally enforceable is critical so you know your wishes will be followed.