5 Estate Planning Mistakes To Avoid

Estate planning is a necessary part of getting older, especially if you wish to protect your family. It’s also very complex and can lead to a lot of confusion. Just like any legal matter, it requires a trained professional to ensure your assets and loved ones are taken care of. If you decide to go at it alone, expect to make some mistakes along the way. Discover 5 estate planning mistakes people make, from an experienced estate planning attorney. 

Estate Planning Mistakes

#1 Creating A Plan Without The Help of An Attorney 

If you’ve been considering an estate plan and have done any research, you’ve probably come across those templates for making an estate plan yourself, without an attorney. This is a really easy way to make sure your assets are mishandled after your death. 

If you don’t have experience in legal jargon, something could easily be misrepresented in the wording of your document. You could think that you’re being explicitly clear, but in the eyes of the law, there could be a lot of room for misinterpretation. It could be as simple as changing a word in the document. That is why you need an experienced estate planning attorney to help you draft this important plan. They can prevent you from making little errors that cause bigger issues. 

#2 Naming The Wrong Person As Executor

The job of executor comes with a lot of responsibility, and requires someone you trust deeply. They will be in charge of managing the distribution of your assets laid out by your will and the court. They will also be in charge of paying off debt collectors and any taxes owed by the estate. If you choose the wrong executor, someone who doesn’t want the responsibility or doesn’t know what they’re doing, your assets could end up mismanaged. You need an organized person who you trust knows you and will abide by your wishes.

#3 Not Making Use Of Trusts

There are many reasons you should make use of trusts in your estate plan. If you’re curious, you should do some in depth research about all the ways trusts can help you. You can also learn about trusts here. Some of the reasons you can utilize trusts are to avoid probate. 

Assets passed via trusts can often avoid the probate process. It can also be used to pass assets to a disabled beneficiary who needs help after your passing. If a disabled person inherits a large sum of money, they may no longer be eligible for public assistance which can drain their assets rather quickly.  

Many people also use trusts in their estate plan to pass inheritance to minors. You can create stipulations in the trust that determine when and how the minor will receive their inheritance, and even how it can be spent. Hiring an attorney, such as Schottler & Associates, can help you create a trust that suits your needs. You can set up a free consultation here.

#4 Forgetting About Taxes In Regards To Your Plan

Many people don’t include estate tax planning in their estate plan. As far as estate planning mistakes go, this is a big one. You could end up owing hundreds of thousands of dollars in taxes, eating up what consists of your estate. This can be completely avoided with a proper estate plan. A proper plan will consider who pays the estate taxes, and will also take into account any income taxes you may need to account for. 

#5 Not Updating Your Plan

One of the most important parts of having an estate plan is keeping it up to date after major life events. For example, if you leave your estate to your wife but then get divorced and don’t update your plan, all of your estate will go to your ex-spouse. By updating your plan, you can ensure your wishes are followed through and that whoever you intend to receive your estate, will. If you update the names of beneficiaries in your estate plan, will, or trusts, you need to make sure you also update the names in your retirement plan and life insurance policy. If you don’t update the beneficiaries’ names across the board, the majority of your estate will still pass to those old names in retirement plans and life insurance policies. 

There are so many estate planning mistakes that could be avoided with the help of a proper attorney. Schottler & Associates has extensive experience helping clients create estate plans that fit their needs perfectly. If you live in the Chicagoland area, set up a free consultation here. To learn more about estate planning, visit here.