Why people make mistakes when it comes to estate planning
Some people have this wrong notion that estate planning is for the wealthy and world-renowned; people who own multi-billion dollar estates round the world. Some think estate planning is too expensive. Others feel that it is not so important, and their possessions will definitely pass on to their loved ones at their death. A lot of people even think estate planning ends with a will, and that estate plan should take the same format for every individual. But all these are fallacies, myths which need to be put away. Some even fail to make so many crucial considerations that determine what form the estate plan should take. So many persons have thus made grave mistakes while creating their estate plan because they fail to realize its importance and delicateness. All these are why you should hire the estate planning lawyer Bergen County. He has your best interests at heart and will enlighten you on several issues regarding your estate which you may not have taken into consideration.
Top mistakes to avoid
The following are mistakes to avoid in your estate plan:
1. Not planning for disability
About 70% of people over the age of 65 likely would need long-term care. Now the cost of long-term care in a nursing home is tremendously high, reaching up to $100,000 annually. Not planning for disability means when you become disabled due to age, you’ll be put in a nursing home. Think about the cost. To avoid this, discuss long-term care insurance and disability planning with the estate planning attorney.
2. Using only a will
Many people think a will covers everything. This is true for some people, but in some cases, you may want to consider using another asset transfer tool. Wills are subject to probate, a complex court procedure which can be traumatizing for your surviving families, and incurring huge fees. You can avoid probate by creating a trust instead. Discuss this with your estate planning lawyer.
3. Not updating your estate plan
If you get divorced, enter into a new marriage, have a new child or asset, then there is need to update your estate plan. This is because beneficiaries will change, and there may be new assets to address.
4. Not considering your ownership of assets
Taking asset ownership lightly can be catastrophic in the long run. You may need to keep some assets jointly owned with your spouse to ease transfer and avoid some taxes. Retirement accounts should not be placed into a trust, and insurance policies should be transferred to a trust to enable the beneficiary receive the whole value of the proceeds.
5. Putting a child’s name on the deed to your real property
When you do this, you are indirectly placing a taxable gift in your child’s hands. If you need to pass a home to your child, discuss with your estate lawyer on how to do this without any inheritance or gift tax imposition.
6. Appointing the wrong executor
First instinct might make you choose your spouse or sibling as your executor, but the emotions attached tend to rule over legal, professional and rational thinking. The estate planning lawyer in Bergen County will help you in selecting the best-fit executor for your estate.
Some persons have the wrong notion that estate planning should be done during old age but this is not so. It should be done when you are still of a sound mind to make intelligent decisions. Why wait till you get old when anything can happen at any moment?
8. Not contacting an estate attorney
It would be wrong to think you can go it all alone, especially when you have complicated assets, assets in multiple states, and you need to avoid probate and estate taxes. Even a will, as simple and basic as it is, requires a lot of strict formalities which when violated, would result in the dissolution of the will, and ultimate intestacy. It is the legal professional who can guarantee that your estate plan is done in line with state laws, and such that it clearly represents your desires and wishes for the future. Not contacting an estate attorney means you’ll be ignorant to several estate planning issues. This is the gravest mistake you can make when it comes to estate planning, which ultimately leads to all other mistakes.