7 Estate Planning Mistakes
The estate planning process can be a complicated endeavor. Those who are unfamiliar with the process may end up making costly mistakes. The following article will provide a list of 7 of the most common mistakes that people typically make during the estate planning process, as well as some ways to prevent making these mistakes.
- Failing to plan properly: Many people end up putting off the estate planning process until it is too late. If you fail to create a plan for your estate, your loved ones will be the ones who suffer when you pass, as they will have the burden of trying to ensure that your assets are distributed properly. It is never too early to start the estate planning process; if you haven’t started yet, you should do so right away. Furthermore, if you already have a plan in place that you haven’t looked at in a few years, you should consider reviewing your plan to ensure that it is up-to-date.
- Not engaging your family and friends in the process: Engaging your family and friends in the estate planning process is recommended, as it allows you to set clear expectations regarding the proper distribution of your estate and could lessen the likelihood that there will be major contention or disagreement among your family after your passing. It would be helpful to personally notify the people you have named in your will or trust.
- Only naming one beneficiary: A beneficiary is a person, named by you, who is entitled to part of your estate. In the event that a primary beneficiary passes away before you do, you’ll want to have what’s known as a contingent beneficiary, who would be next in line to receive that part of your estate or any specified asset. For each asset, account, or policy, you should ensure that you list a primary beneficiary and one or more contingent beneficiaries.
- Not including final arrangements in your planning: It is imperative that you include in your plan your specific desires regarding your final arrangements (i.e. funeral or burial arrangements). Doing so will ensure that your loved ones will not have to make these difficult decisions on their own while grieving your passing. Additionally, you should also consider adding to your plan any wishes you have regarding end of life care (i.e. hospice, assisted living, etc.).
- Not funding your trust properly: Establishing a trust is one way to secure your assets. However, if your trust isn’t funded properly, it will essentially be useless.
- Not taking estate taxes into consideration: Estate taxes can be significant and can result in your loved ones receiving less of your estate than you originally anticipated. Fortunately, unless you have a very large estate, your estate will not be taxed at the federal level. Specifically, in Massachusetts, if your estate is worth less than $1,000,000, you are not required to file a tax return for the property or pay an estate tax.
- Failing to update your plan when necessary: A good estate plan is often updated to reflect any major life changes (i.e. a marriage, divorce, the birth of a child or death of a family member or beneficiary). In general, you should ensure that you review your plan every three to five years, even if no major life events have occurred.
Do You Need Help with Estate Planning? Speak to a Greater Boston Area Elder Law Attorney
Estate planning can be a very complicated endeavor. If you need help with estate planning, Fisher Law LLC can provide assistance. Our knowledgeable Norwood estate planning attorneys will ensure that you are provided with the proper information to accomplish your estate planning goals.