Three Estate Planning Mistakes To Avoid
When the time comes, you want your estate to be settled in a way that provides the least amount of stress and responsibility for your loved ones. This is why it's vital that you take the time to plan your estate well in advance of your passing with an attorney for probate law. The following are a few mistakes you will also want to avoid during this process.
#1: Not organizing your paperwork
Sure, you have wills, trusts, and insurance policies, but can they easily be found when needed? It can take years to unravel an estate if the beneficiaries or their representatives aren't sure how to track down all of your assets. The quickest way through probate is to keep everything together. Sit down with your attorney or estate planner and list every single asset that you have. Each time you add something to your estate or change anything, make sure it is updated with your master estate plan – both your copy and the one that your attorney has on file. This way there will be no surprises when the inevitable occurs.
#2: Skipping on naming beneficiaries
It can cost your loved ones a lot in probate if you fail to name them as beneficiaries. This is because any life insurance policies without a named beneficiary are considered to be in your name. This makes it a taxable asset on your estate, which can eat up the amount of the policy. This commonly happens on insurance that is part of a wage packet, such as those given as a benefit from your employer, since you may overlook completing the paperwork that names the beneficiary. At least once a year, look over your estate and make sure to update all of the beneficiaries, as well as any other necessary information.
#3: Setting up an incomplete trust or skipping it entirely
A trust protects your assets from creditors, as well as helps to shelter items from certain taxes. Instead of willing your assets directly to the beneficiaries, place them into a living trust or similar vehicle. Then, the beneficiaries can be named to the trust. If you are married, set up a trust for both you and your spouse to avoid the issues with a joint trust, since a joint trust sometimes takes longer to settle and can be more stressful for the surviving spouse.
For more help, contact a probate attorney in your area that can help you with estate planning.