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Mistakes to avoid when creating an estate plan

On Behalf of | Mar 5, 2024 | Estate Planning |

Creating an estate plan is an important step in ensuring that your assets are distributed according to your wishes after your passing. There are several common mistakes that individuals make when establishing and maintaining their estate plans. By being aware of these pitfalls, you can better safeguard your legacy and provide clarity for your loved ones.

One of the most significant mistakes people make is procrastinating when it comes to creating their estate plan in the first place. Unfortunately, none of us can predict when unforeseen circumstances may arise, making it essential to have a plan in place sooner rather than later. Waiting until an illness or old age sets in can complicate matters and lead to rushed decision-making. There is also a possibility that something could happen to you tomorrow, without warning. You need to have a plan in place now.

Not updating an existing plan

Another mistake is failing to update your estate plan regularly. Any type of truly significant life change will likely require an update to your estate plan. It’s essential to review and update your plan periodically to reflect these changes and ensure it remains current.

Forgetting about taxes

Many individuals overlook the potential tax implications of their estate plan. Failing to consider estate taxes, gift taxes or income taxes can result in a significant reduction in the assets passed on to beneficiaries. Consulting with an estate planning attorney can help you to minimize tax liabilities and maximize the value of your estate for your beneficiaries.

Not planning for incapacity

In addition to planning for the distribution of assets after death, it’s essential to consider what would happen in the event of your incapacity. Establishing documents such as a durable power of attorney, healthcare proxy and living will can better ensure that your wishes are carried out regarding medical decisions and financial matters if you become unable to advocate for yourself.

By avoiding these common mistakes and taking a proactive approach to estate planning, you can help to ensure that your final wishes are carried out effectively and provide greater peace of mind for yourself and your loved ones moving forward.