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3 common estate planning pitfalls to avoid

On Behalf of | Jul 10, 2022 | Estate Planning | 0 comments

Estate planning is an important task for every individual regardless of how old you are or how much wealth you have. It allows you to prepare for taxes, probate and your loved ones’ care after your passing.

However, it has the potential to be complex. The number of individuals writing wills has seen a surge. Many people believe writing a will is enough, but estate planning generally involves more. As a result of misconceptions like this, people tend to make similar common mistakes during the estate planning process.

1. Keeping everything a secret

It is important to discuss the contents of your plan with the beneficiaries and executor. While it may seem easier not to, particularly if you suspect your decisions may ignite conflict, having a conversation with all the involved parties may help them adjust to your plan. It will also allow you to gauge their reaction and see if you need to make changes, such as a no-contest clause.

2. Neglecting your final arrangements

Your funeral is not a topic many individuals want to dwell on. Preparing for it by purchasing insurance, pre-paying for certain services and products or designating funds specifically for such purposes makes everything easier for the loved ones you leave behind. You also need to have a healthcare directive and medical power of attorney to ensure the carrying out of your end-of-life care wishes and avoid your loved ones having to make difficult medical decisions for you.

3. Forgetting to factor in taxes

Any inheritance or gift you leave behind may be subject to taxes, depending on their value. This may reduce the amount your beneficiaries receive.

By investing in proper estate planning, you prepare for your loved ones’ futures. It is important to watch out for pitfalls.