Estate planning might not sound like the most exciting way to spend your time, but it is definitely one of the most beneficial. Planning your estate ensures that your assets are distributed correctly after you’re gone. Without the explicit instructions a plan would contain, a state-appointed representative will be given the responsibility of distributing your assets as they deem fit.
But before you begin trying to plan your own estate, there are some things you should know.
One of the most common estate planning mistakes is to move forward without a qualified attorney. Those do-it-yourself packages are not going to accommodate anything unique or unusual, so providing for a disabled dependent or children from multiple marriages is going to be tough.
Another common misconception is assuming that you don’t need an estate plan because you’re not exceedingly wealthy. Estate planning isn’t just for the very rich – quite the contrary, anyone who wants to ensure that their assets and property go to specific loved ones need an estate plan and what’s more, many people discover that their estate is worth much more than they had estimated.
Other common mistakes include:
- Ignoring strategies to save on estate taxes. Estate planning includes some valuable tools that can help you minimize and even eliminate taxes in some situations. Leaving your entire property to your spouse – this may sound like a smart thing to do but only if you know for sure that your spouse will leave your share of the estate to your other family members if you should pass first. Once your spouse inherits your portion of the assets, they become his or hers and when they die, it’s their estate plan that will dictate how the assets are distributed – not yours.
- Not giving a thought to your children. Estate planning is not only about assets, but also about your minor children. While planning you should be sure to designate a guardian of your minor child.
- Failing to review. Your financial and personal circumstances can change after you have made your basic plan. Even the taxes applicable on your property can change on a yearly basis. It is, therefore, in your best interest, to review and update your plan and Will according to the changed circumstances.
- Not sharing your plan with others. Documents related to estate planning would be useless if no one knows where they can find them.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.