Many people are diligent in managing their lives but drop the ball when it comes to properly planning what will happen when they pass away.
After spending a lifetime of earning and accumulating wealth, it would be an absolute travesty to not properly manage what happens with that wealth upon your death. Just make sure you don’t make some basic mistakes along the way.
Estate planning mistakes to avoid
As mentioned above, the number one mistake is not estate planning at all. However, let’s take a look at some common mistakes made in the estate planning process itself:
- Procrastinating: Sometimes, estate planning is like going to the dentist. One is aware that it is necessary, but it is often delayed until it’s too late.
- Not transferring a life insurance policy to a life insurance trust: One strategy that is employed to avoid the hefty taxes on life insurance policies in an estate is to place the proceeds in a life insurance trust.
- Not updating the will: Maintaining and updating a will when things change is a necessary part of estate planning.
- Not making gifts to reduce estate tax: A great strategy to reduce estate tax burdens is to give monetary gifts to your loved ones during your lifetime.
- Not planning for disability: Consider appointing a power of attorney or creating a living trust in case you become disabled.
- Choosing the wrong person as executor: Choosing an executor is one of the ultimate acts of confidence. Many believe that a spouse or child is the best choice. However, loved ones that are grieving are often already experiencing a high level of pressure and emotion. Sometimes, an impartial party that can objectively execute the estate is the best choice.
Estate planning is lovingly acting with foresight and wisdom by considering every possible scenario, even uncomfortable ones. This is why it is often beneficial to lean upon the counsel of an advocate that is experienced in high-asset estate planning.