The goal of estate planning is to ensure your assets transition to your loved ones after you pass away. With a comprehensive estate plan, that process will happen in a timely manner and at the least cost to you, while maximizing any tax savings available to you.
There is no perfect plan for everyone because each client has different family dynamics, assets, concerns, and goals. If you are getting started on planning your estate, here are the top five mistakes to avoid.
- Failing to fund your trust. You spent time, money and effort to create a Trust, but the most important steps come after you sign your documents. In order for the Trust to have any benefit, you must have assets titled in the Trust or name the Trust as beneficiary to many of the assets you own. A big exception are retirement accounts since the enactment of the SECURE Act, but it is important to know who your primary and contingent beneficiaries are on these accounts. When you work with an estate planning attorney at Sinclair Prosser Gasior, we will guide you through the funding process.
- Unintentional beneficiary designations. It is important to know how every asset you own will be distributed upon your death. If you leave one child as the beneficiary on your life insurance policy and they survive you, then it will not go into your Trust or be distributed according to your Will. This may result in unequal distribution that wasn’t intended.
- Skipping the formal execution process. Don’t ever skip having the documents executed, witnessed and notarized in accordance with your state rules. Failing to properly execute your plan could make it invalid and open the door for someone to contest your estate plan. This should not happen if you are working with an estate planning attorney and trusted advisor, but it is a critical step that is sometimes overlooked with do-it-yourself plans.
- Having an outdated plan. Laws change and so do your intentions and goals. This is why it’s important to review your estate plan every three to five years with your estate planning attorney. You can save your executor and family from major headaches down the road if you keep your estate plan up to date.
- Not having Power of Attorney documents. Power of Attorney documents are critical to plan for your incapacity. These legal documents work during your lifetime to allow someone else to step in and manage either your finances or health. Power of Attorney documents are also important to keep up to date as the years go by so your family can avoid petitioning the court as your guardian.
If you are ready to get started with your estate plan today or schedule a review of your documents to avoid the mistakes discussed, please contact us at Sinclair Prosser Gasior to schedule a consultation.