Avoiding Estate Planning Mistakes

Estate planning is something that all of us must do at some point or another. You may not be comfortable with the idea of planning for what will happen to your estate after your death, but it’s best that you do so now. This will not only give you peace of mind but ensure that your loved ones don’t spend time fighting over your assets. In theory, you could attempt to handle estate planning on your own. But in reality, this could easily lead to mistakes that will cost not only you but your loved ones. Therefore, it’s important for you to reach out to professionals regarding wealth management solutions. With that in mind, we’re going to look into some of the common estate planning mistakes, and how you can avoid them.

1. Naming One Beneficiary

Not everyone has a huge circle of family and friends. This may lead you to believe that you should just have one beneficiary when considering wealth management solutions. While it’s fine to have one main beneficiary, it’s possible that your beneficiary would pass away before you do. In that case, you’ll need to have a contingent beneficiary, to essentially serve as a backup in case anything happens to your first beneficiary.

2. Forgetting Taxes

One of the main reasons why you need advice on wealth management solutions is that taxes can be quite complex. If you forget about estate taxes, you could leave your beneficiaries the responsibility of paying off your taxes. Unless your estate is quite large, you won’t have to deal with federal taxes.

3. Updating Your Plan Infrequently

It’s incredibly important for you to consider updating your estate plan frequently. Just as your estate changes, so too should your estate plan change. With the assistance of an estate planner, you can review and update your estate plan more frequently. Any major life event should necessitate an update; but in general, you should otherwise update your plan every three to five years.

4. Improperly Funding Your Trust

If you’re creating trust, you need to ensure that it’s properly funded. It can be difficult to determine how to fund your trust properly, as the process is complex. Talk to an estate planner about how to do so.

Estate planning is difficult. Don’t do it alone; that way, you won’t make as many mistakes. Contact us today with any questions.

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