Why you need an Estate Plan
Many people make the mistake of not having an estate plan in place because they believe estate planning to be something for the wealthy, those who have valuable assets and estimable net worth. However, this is a fallacy. So long you have something to your name — could be a car, a home or bank account — estate planning is for you as well. Having an estate plan in place helps maximize the value of your property which will be passed down to your heirs (by taking advantage of tax exemption laws), and it gives you the opportunity to make appropriate decisions regarding how your asset will be managed during incapacity or disability. Not having an estate plan can mean trouble for you and your family when the unforeseen occurs. When death or disability comes, there will be conflicting opinions and claims from your family members on how your estate, no matter how small, should be managed or distributed. But when you have an experienced estate planning attorney create for you an estate plan, he puts all unforeseen yet possible occurrence into consideration (such as accident, mental diseases, death, etc.) and helps you plan towards them so as to avoid unnecessary confusions in the future.
Common mistakes in estate planning
Not having an estate plan
This is the most common yet gravest mistake in estate planning. A lot of people go about their daily activities every day and do not find time to ponder about what would become of their hard-earned assets should the inevitable occur. Some people are even afraid to think about death and the possibility of sudden physical or mental disability, and so they fail to make plans towards how their estate will be handled when such things happen.
Failing to update your estate plan
After creating an estate plan, situations may change so long you’re still alive. Your business structure can change, you can acquire new assets, divorce can occur, and a new baby can be born into the family. In all of these situations, you have to make changes to your estate plan to accommodate these new developments. For a new birth, you have to update your will to make provision for that child.
Many people fail to plan for disability since they do not already have it. As bad as it is to think about, accident or disease can render one disabled. It is also common for older adults to develop Alzheimer’s and in such a situation, someone else would have to manage their estate and make medical decisions on their behalf. He will help you create documents like the Durable Power of Attorney, a Living Will or Trust to appoint a trusted fiduciary who will act on your behalf. You are the one to select that person yourself, someone whose competence you trust.
Other common mistakes includes
Not updating your beneficiary designations
There are certain assets to which you must designate a beneficiary, such as retirement accounts, life insurance policy, and joint accounts. Such assets pass on to your designated beneficiary whether you have a Will or not. If the designated beneficiary of such an account is your ex you just divorced, or someone who you has passed away, then you need to update your beneficiary designation.
Not planning for estate tax exemption
In New York, when you individually own an estate worth more than $5.25 million, your estate would be charged an estate tax up to 16% of its value. Below this amount, your estate would be exempted. So if you find your estate valuing above this threshold, making gifts to reduce its value below that threshold is an intelligent way of escaping estate tax. Many people fail to do this and end up losing a significant portion of their estate to tax authorities. An estate planning lawyer New York is well knowledgeable in New York estate tax laws and will help you find ways in reducing your estate taxes.
Doing estate planning by yourself
Estate planning involves many legal and financial laws which you may lack adequate knowledge. Therefore, in trying to draft estate planning documents yourself, you may end up breaching some laws or neglecting some core requirements, thereby making your estate plan void. In addition, you may not know that there are certain privileges and benefits available to you through some estate planning tools. Only a professional in this field would have sufficient knowledge for making the best beneficial decisions.
Contact an Estate Planning Attorney near Me 10065
Estate planning is a legal matter better left for the law professional, and doing it yourself cause you a lot of difficulty and errors. Contact a qualified New York estate planning attorney near 10065 today.