Estate planning is one of the most important aspects of financial health. Among other things, an estate plan protects and transfers wealth to family members, and other designated beneficiaries, in accordance with one’s desires. Despite its importance, it is estimated that over half of Americans, or 56 percent, do not have a current plan.
National Estate Planning Awareness Week is an opportunity to address this avoidable issue. The event involves thousands of experienced estate planning professionals and organizations, all with the shared goal of public education and positive impact. This year’s nationwide event will be held from October 21st through the 29th.
As a precursor to this important week, let us share several significant estate planning mistakes to avoid in your planning.
1. Thinking you do not need an estate plan. Outside of a legally sound plan, there is no guarantee that your property, investments, and legacy can be passed on and enacted to your choosing. In fact, not having a plan can ensure you leave these important decisions in the hands of others.
2. Assuming an estate plan is only about money. Estate planning involves the transfer of financial assets, typically through wills and trusts, but that is not all. A wide range of other issues apply. For example, you may want to create a durable power of attorney to plan for your potential incapacity, a business succession plan to manage the transfer of your business in a crisis, or health care directives that can guide your chosen decision maker to make health care decisions as you would wish.
3. Failing to consider durability. A power of attorney document allows for a trusted person, like an adult child, to act on behalf of another person in a way that is consistent with the creator’s wishes and best interests. A durability provision affords that power even when the creator is unwell or otherwise incapable of making his or her own competent decisions.
4. Ignoring tax issues. Wealth protection is a core component of any estate plan, and tax laws, due to their changing nature, are a leading consideration. This is where your estate planning attorney’s guidance will prove critical to ensure that you have the right estate plan to maximize your tax benefits.
5. Not seeking expert advice. Crafting the right plan for an individual’s specific needs can involve financial and legal complexities. With so much at stake, expert guidance from an experienced estate planning attorney can go a long way toward achieving peace of mind.
We know this article may raise more questions than it answers for you. There is never a wrong time to ask them.