What Are the Most Common Estate Planning Mistakes?

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Estate planning mistakes are easy to make.

Many people think estate planning is simple.

You just write out who you want to get your stuff.

Seems easy.

Right?

According to a recent Comstock Magazine article titled “Five Mistakes to Avoid When Planning Your Estate,” estate planning is more complicated than many may realize.

When people do not recognize this fact, they can get themselves into trouble.

What are some common estate planning mistakes?

Estate planning mistakes are common occurrences.
Estate planning mistakes are avoidable.

Misunderstanding Estate Law.

Many people to not understand the purpose of an estate plan.

Often the idea of an estate is associated with mansions and wealth.

The truth is estate planning is important for even those with modest assets.

Getting Bad Advice.

A common estate planning mistake is to seek advise from someone other than an experienced estate planning attorney.

Not all attorneys have the necessary knowledge to protect your assets, minimize taxes, and ensure you are prepared for incapacity.

In addition to an estate planning attorney, you will want to include a financial advisor and accountant on your team.

Do not settle for a company “selling” a trust, whether lawyers or door to door salesmen, or an insurance policy.

This is a dangerous estate planning mistake.

Although trusts are excellent estate planning tools in the right circumstances, they are certainly not necessary for everyone.

Naming Yourself as a Sole Trustee.

If you become incapacitated through injury or dementia, you may place your estate at risk.

You should also appoint either a trusted individual or a professional trustee to serve in the role should you be unable to act as trustee.

Losing Track of Assets is a Problematic Estate Planning Mistake.

If you do not have a list of what you own, you can easily overlook important assets.

You should distinguish between assets assets transferred through probate with a last will and those passing by various non-probate transfer methods.

Deciding on Options Without Being Fully Informed.

Not understanding your decisions is a huge estate planning mistake.

This makes the counsel of an experienced estate planning attorney essential.

By acting blindly, you could trigger unintended tax or inheritance consequences.

Your estate is personal and should reflect your wishes, federal law, and state law.

Be intentional when it comes to avoiding common estate planning mistakes.

Reference: Comstock Magazine (Dec. 2019) “Five Mistakes to Avoid When Planning Your Estate”