Every adult needs an estate plan, regardless of age or financial status, according to estate attorneys in Littleton and other places in Colorado. Estate planning is your way to protect your assets and property in the event of your death. With the unpleasant thought of your life ending, it is understandable that you might not carry out your estate plan in the right way.
When planning for the distribution or management of your estate and assets upon your demise, don’t make the following mistakes:
1. Not Having an Estate Plan
The most common mistake is having no estate plan at all. You might be procrastinating, thinking it’s not relevant right now, but it’s better to be prepared as early as possible. Apart from preparation, there are other benefits to estate planning such as reducing estate taxes and creating a legacy.
2. Not Updating the Beneficiaries
Many changes in your life and family may have occurred between drawing up an estate plan and your death. There may have been births, divorces, or deaths. You may have also lost or acquired property. To make sure that your assets get to your intended beneficiaries, it’s wise to update your will every few years or after major life events.
3. Naming a Specific Child in a Deed
If you put your child’s name on the deed to your home, you’re likely passing on a highly taxable gift. The better way to do this instead is by creating an estate plan that passes on the property via inheritance. This is because only Nebraska and Pennsylvania collect inheritance taxes on properties passed on to children.
4. Choosing the Wrong Executor
You might want to name a family member as your executor or trustee, but this can be a bad idea. There may be future disagreements between family members, so choosing an objective third party is recommended to avoid conflicts of interest.
5. Not Seeking Professional Advice
While the estate planning decisions fall on your shoulders, it’s still important to hire estate planning professionals for guidance. They can give you more in-depth information and insights about estate planning so you won’t make the mistakes mentioned above.
Estate planning makes sure that the properties and assets you’ve worked hard for goes to the people or institutions who you think deserve them. It’s essential to recognize and avoid the mistakes you’re likely to make when planning for the distribution of your estate.