facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Common Estate Planning Mistakes to Avoid Thumbnail

Common Estate Planning Mistakes to Avoid

Creating an estate plan is a complex process that involves careful consideration and efficient communication among many interested parties. The ultimate goal is to distribute personal assets to your desired heirs in an efficient manner. However, in many cases this does not happen as a result of poor planning. There are many reasons for this, but below are some common mistakes to avoid:

1. Have a Plan

It seems basic but it can be a financial disaster for your family and estate if you do not have some kind of a plan in place at all. Neglecting to have a plan ultimately leads to the probate courts deciding who is entitled to your assets. This is obviously not ideal and can potentially lead to serious arguments amongst your family members. That is why it is extremely important to have something in place that provides direction to your family, even if it is just a simple will designating a default beneficiary.

2. Think Beyond a Single Beneficiary

Don’t assume the first party you designated as a beneficiary will be around by the time your estate plan takes effect. Life doesn’t stay frozen in time just because an estate plan designates one specific person to be a key beneficiary. Consider expanding your beneficiary list to a second or third layer deeper as a contingency if the first person chosen is no longer available. You will be making your executor’s task much easier to do getting your assets distributed properly.

3. Regularly Review Your Will, Estate Plan, or Trust

If you have an existing will, estate plan, or trust schedule a time to ensure it is regularly updated. Your financial situation and universe of beneficiaries is regularly changing and oftentimes growing. Big life changes that should be reason to adjust your existing estate plan include new  family additions, inheritance of new assets, purchasing large assets such as a new home. In addition to personal changes, federal and state tax laws are constantly changing which could render your existing estate plan outdated. Our recommendation is to review your plan at least every 5 years to see if any changes need to be made.

4. Consider Your Own Health

People don’t think about their health when they plan an estate. Very often a surviving spouse may need health support or a personal condition may trigger a disability. These translate into costs that have to be addressed for medical services where important decisions need to be made. Not having a clear path for healthcare can be a big issue if someone needs to make these health decisions for you. Consider drafting a healthcare power of attorney or living will to ensure your desires are carried out.

5. Transferring Assets as a Gift

An easy way to transfer assets early without taxes is a gift, but people hardly use it while alive. Any individual can transfer up to $15,000 without taxes on the amount or value annually to any other individual. This is an easy, simple way to liquidate parts of an estate early without the transfer having to go through the estate distribution process after a person passes away. Even better, you are entirely in control of the asset and transfer as opposed to relying on an executor.

Are you looking for some help to avoid these mistakes? Please schedule a complimentary consultation with our team to review your plan.




Check the background of this firm/advisor on FINRA’s BrokerCheck.