Creating an estate plan is something that many people think about as they get older. There are many components to an estate plan—including wills, trusts, and transition plans—and navigating the estate planning process can be difficult. Below are three of the top mistakes people make going into the estate planning process.
- One of the biggest mistakes you can make when thinking about the end of your life is to not have an estate plan at all, or beginning the process too late. Not only is an estate plan beneficial to the settlement of your estate after your passing, but there is a lot of work that goes into creating a plan that will be executed smoothly. Not having a plan in place means that your financial and personal affairs will go into limbo, creating an enormous burden for your loved ones.
- Choosing the wrong person to administer your estate can also be detrimental. The executor is responsible for managing your assets until they can be passed on to your inheritors, handling all major decisions after your death. Not having a suitable executor can mean the mismanagement of your estate and potential financial and property losses to those you willed your assets to.
- Finally, ignoring the taxes that come with inheritance is not a wise decision. In most cases, the amount of ‘gifts’ you are allowed to pass on tax free cannot equal more than $13,000 per spouse; this means that if you are giving someone your house after your death, for example, they can expect to pay large fees. Regardless of how well-intentioned these gifts are, they can cause a serious financial burden on the recipients of such gifts. Luckily, things like living wills and living trusts make these transitions easier.
By creating an estate plan, you are leaving nothing to chance—as long as the plan is well-executed. Estate plans that do not have firm wishes or are out-of-date can cause just as many headaches as not having a plan at all. If you have questions about the estate planning process, feel free to contact the Law Offices of Anne Dowden Saxton for a consultation. We will make sure that you are on the right track to providing security and peace for your loved ones.