There are two ways to handle the planning of your estate settlement. You can learn what you need to know and execute what is generally a fairly simple plan, or you can ignore the fact that some day you'll fade away from this life and thereby leave the distribution of your assets to the law and to chance. My recommendation is that you begin the learning process right this very minute. What you learn through this blog post could actually affect your heirs for decades to come.
I was introduced to the 8 estate planning mistakes by a friend who directed me to Bankrate.com . I'll give you just the highlights here, because the original material is definitely worth your time to read it. If you don't have a plan for the distribution of your assets, by the time you finish reading the referenced article, you should be ready to undertake making one. Here now are the 8 biggest estate planning mistakes to avoid:
- Don't remain ignorant of the facts. If you intend on planning your own estate settlement, take time to learn about your options. Don't simply toss your intentions to a lawyer and expect them to do something about it for you. Learn about what you need to know and approach your lawyer from an educated perspective. This will save you both time and money.
- Don't expect that a simple will can take care of the whole process. A will does not circumvent probate. Wills are simply declarations of intent. It is recommended by experts that you place assets into a living trust.
- Don't add the names of your heirs to your property deeds. The taxation implications of this can be mind boggling. The inheritor of real estate has distinct advantages. Take time to learn about this.
- Don't put off till tomorrow what you can do while you're still alive. Are you absolutely certain that you'll wake up tomorrow morning? If not, get a legal will documented at the very least.
- Don't ignore the value of trusts. It is estimated that probate fees can injure estate value by as much as ten percent. A properly structured trust can avoid going through probate altogether. A basic will leaves your entire estate exposed to the probate process. Discuss this with an estate attorney.
- Don't ignore basic record keeping. When you die, someone is going to have to pick up all those loose ends. Leave them an organized and up to date picture of all your financial details.
- Don't let your will or trust become out of date. Keep your estate planning up to speed with your life. Changes in status, such as the birth of a child or a divorce need to be adjusted for on insurance policies, retirement funds and other asset accounts. Don't let your assets go to someone you no longer want them to.
- Don't avoid discussing your final wishes with your family before it becomes necessary to do so. Hammer out the details and get them down on paper. Unless your last wish is to throw your family into heart wrenching turmoil, opt for open discussions. It's your estate, you should mediate the outcome.