Poor estate planning can be costly.
When it comes to estate planning, you need to do it right.
If you mess up, the seemingly simple mistake can have dire and lasting consequences.
According to a recent The San Diego Tribune article titled “6 estate-planning mistakes to avoid,” the most estate planning problems are birthed from six common issues.
What are they?
This one is pretty obvious.
No plan is not an option.
If you are at least age 18, you should have an estate plan.
Death and incapacity do not discriminate.
You should be legally prepared if either were to strike.
Not discussing your wishes.
After creating an estate plan, the most loving thing you can do for your family is talk about it with them.
They need to know why you made the choices you did.
This will minimize both stress and family conflict should you become incapacitated or upon your passing.
Only focusing on taxes.
We all know the only two certainties in life are "death and taxes," so it should come as no shock that tax avoidance can be an important benefit of estate planning.
However, that cannot be your sole focus.
You must also make provisions for any minor children or children with special needs if either is in the picture.
Estate planning is also essential for incapacity planning or charitable giving.
Leaving assets to children directly.
Minor children must have restrictions concerning how they can receive an inheritance.
If you leave an inheritance to them directly, you may be creating probate issues.
When they are old enough to own property, they may gain full access to your funds.
Most young people are financially irresponsible, but many are not.
Be sure to consider how to best set them up for success and protect the inheritance "from" them and "for" them as appropriate.
Improperly titling documents.
Do you have a blended family?
Do you have your own property from a previous marriage?
If yes, you should ensure that such property passes to the right children.
Making a mess of your trust.
Trusts can be complicated.
You will need an experienced estate planning attorney to set up your trust.
Once the trust is created you need to follow through to fund it.
An empty trust does little good, just like a beautiful automobile is going nowhere with an empty fuel tank.
Once you have your estate plan in place, review it regularly.
Reference: San Diego Tribune (April 18, 2019) “6 estate-planning mistakes to avoid”