In many cases, knowledge is power. But in estate planning, knowledge by itself can be a dangerous thing. You need to pair knowledge of the most common estate planning mistakes with another kind of knowledge: what to DO about those mistakes. And we would even add a third thing: knowing WHO to ask for help!
For example, you might know that it is desirable to avoid probate, but that is of little use unless you also know how to create an estate plan that will keep an estate out of probate. For the same reason it is important to not only know what common estate planning mistakes are but also to know how to avoid them.
A recent article by The Street entitled "How to Avoid the Most Common Estate Planning Mistake" discusses the most common mistakes and how to avoid them. Tips from the article include:
- Updating Beneficiary Designations – People often fail to update the beneficiaries of their retirement accounts and life insurance policies, which leads to the wrong people getting the assets. Avoiding this mistake is as simple as filling out a form.
- Communicating With Heirs – When your heirs do not know what to expect from your estate plan, it can lead to hurt feelings and anger. This can be avoided by telling people what to expect.
- Creating Your Own Will – If you create your own will, you are likely to make mistakes in it. To avoid this problem, seek the assistance of an estate planning attorney.
- Failing to Account for the Estate Tax – If you do not plan for the estate tax, then your estate might face a hefty bill that could have been avoided.
Fortunately, these potential miscues can be avoided by contacting a qualified estate planning attorney to guide you.
Reference: The Street (October 31, 2015) "How to Avoid the Most Common Estate Planning Mistake"