It's so easy to put off estate planning, when lives are busy and there are more inviting things to think about than death and taxes. Perhaps the most common mistake is thinking that estate planning is a do-it-yourself project. Only if you want your loved ones to inherit a mess!
The biggest problem that results from failing to address estate planning in a timely manner is simple: it often leaves loved ones with a mess to clean up that can be expensive, time consuming and very public. The Street's "Mistakes You Need to Stop Making," takes readers to task for putting this necessary responsibility on the backburner. Three basic estate planning mistakes that are more common than you would think:
Mistake 1: Not Signing a Will
Even those who are proactive in their planning sometimes forget to dot the I's and cross the T's-some people, for example, write a will but never actually sign it! This becomes a priority only after a health crisis or another life change. That's risky! It's really important to have a signed will in place before something urgent arises.
Mistake 2: Tax Faux-Pas
Federal estate tax laws exempt taxes on estates with assets under $5.43 million per person, but some people with assets less than the threshold think they're exempt from estate planning. Not so! There are a number of other benefits for estate planning. This includes avoiding financial disputes about the inheritance, protecting assets from creditors and lawsuits, and donating to charity. In addition, state estate tax is part of the process, too. Your state might have a much smaller estate tax exemption limit.
Mistake 3: Negligence/Being Out-of-Date
Failing to keep your estate plan up-to-date is another dangerous mistake. Make sure that you do a review with your estate planning attorney any time a major life event happens, for example, divorce, a death in the family or the birth of a grandchild.
Talk with a qualified estate planning attorney and avoid these estate planning mistakes.