- Not planning for your minors
While your adult children can inherit, your kids below 18 cannot. So if you’re leaving assets for that 15 year old son, he cannot receive it until three years later. To ensure your minors enjoy the kind of treatment you want for them, you have to name a guardian for them. This guardian will use the assets you live for the child for the child’s benefit until they come of age to handle it themselves. If you fail to make such plans, the court may choose a guardian for you, and it may not be the person you wish.
- Not writing a will because your assets are few
Some people fail to write a will because they feel they don’t have so much to leave behind. But estate planning is not only for the high net worth individuals. If you have money in the bank, a small scale business, or a car, then you need to say who receives each of these things. If not, your family will end up fighting over them when you die. You don’t want your family getting brutal with each other when you’re gone. Then you have to write a will so they know your wish, and then they would have no option but to abide by it.
- Not updating your estate plan
A lot of people keep their estate planning documents immediately after creating them. Then they forget all about the documents until death. But what happens when one of your named beneficiaries dies before you? What if you get divorced or remarry and get new kids? What about those new assets you acquire? What happens when you die without addressing them? Your wishes will not be known, and your new children may not get what you’d have wanted for them, whereas your divorced spouse still benefits a huge part of your estate. It is important to review your estate plan periodically and effect changes when and where necessary.
- Not planning for tax
People write wills without giving a thought to tax imposition. If you do not plan with an eye towards tax, you may be leaving a heavy tax burden upon your loved ones. New York imposes an estate tax on estates valuing over $5.85 million. There is also a federal estate tax for estates exceeding $11.58 million. Put together, your beneficiaries would have to give up a considerable part of the estate to the government.
- Estate planning is for the rich
At some point in our lives, this must have popped up in our mind as to why a middle-class individual should plan an estate? or how big this individual’s house is and what not? These thoughts are driven by the fact you don’t know what an estate is. An estate is anything of value you possess and would want someone to be in possession of someday, from jewelries, to cars and houses etc. These items altogether make up your estate, and certainly anyone reading has something of value they want preserved and inherited someday. Everyone, from an average earner to a multimillionaire needs estate planning as it is a life planning process that gets the best of present times to secure the future.
- Not remembering to update your estate plan
Many people create their estate planning documents and then keep them in a cupboard until the inevitable happens. But the truth is that people experience life changes as life goes on. You may get divorced, remarry, get new children, grandchildren, or even lose your beneficiary or fiduciary. You would have to reflect such changes in your estate plan as they occur. It’s important you address the new assets and new beneficiaries, while removing those you’ve lost. If these changes are not reflected, your newly gotten loved ones may be left out of the inheritance.
- Not opening up to your estate planning attorney
If you’ve made the great decision to get help from an attorney, then you have to open up to them. Discuss your personal goals and estate situation as it is with this knowledge they’ll create your estate plan. They can only make suggestions based on the information you provide them. If you keep things from them, then they may not be able to provide you enough coverage for all your concerns.
