Even though planning your estate isn’t an enjoyable job, it’s necessary so that you can efficiently and successfully transfer all of your assets to those you leave behind. With careful planning, your heirs can avoid paying estate and federal taxes on your assets. Also, a well-planned estate avoids confusion for your loved ones.
Still, with all the advantages of estate planning, many people must correct their mistakes. The most common mistake in estate planning is not getting around it. Make sure that you take the time to plan at least the financial portion of your estate to leave your loved ones behind with some security. The following seven mistakes often put families into great difficulty after a loved one’s passing.
- Don’t fall into the trap of thinking that estate planning is just for the rich. This is completely false, as planning your estate is essential for anyone with any assets to leave behind. Many people don’t realize that their estate is as large as it is, especially when they fail to consider the assets from their homes.
- Remember to update your will and to review it at least once every two years. Factors that can change information about your beneficiaries include deaths, divorce, birth, and adoption. As your family structure changes, so do your assets and who you want to leave them to.
- Don’t assume that taxes paid on your assets are set in stone. Talk to your financial planner about ways your beneficiaries can avoid paying taxes on your assets. There are several tax planning strategies to minimize or avoid taxes altogether.
- All of your financial papers should be in order so that it’s easy for someone to find them. Ensure that one of your loved ones has information on where to find the papers necessary for planning after your death. You need to store your important documents where a trusted person can get to them in the event of your death, but they also need to be secure and safe from fire. Click here for a fireproof document container.
- Don’t leave everything to your partner. When you leave all your assets to your spouse, you sacrifice their portion of the benefit. You’ll get an estate tax credit but will forfeit part of this if your spouse is your only beneficiary.
- Ensure that your children are well planned for. Many people take much time deciding what to do with their assets and forget that they must appoint guardianship for their children. There are many details to take into consideration when it comes to guardianship.
- If you don’t have a financial advisor, get one. Financial Planners and Advisors are trained intimately in these matters and can provide asset protection well above whatever fees they may charge. If you need help selecting the right financial advisor, get the Financial Advisor Report. If you need help finding a qualified Registered Financial Consultant, visit IARFC.org.
The above mistakes are common when people are planning their estate. Take the time to plan for your death even though you think you have years before it becomes an issue. The key to successful estate planning is being prepared.
If you need assistance, contact me directly if you are in or near the metro Nashville area. If you are outside Middle Tennessee, locate a qualified fee-only Registered Financial Consultant (RFC) near you.
