Why people make mistakes when it comes to estate planning
Some people think estate planning is for the wealthy and world-renowned people owning multi-billion dollar estates worldwide. Some think estate planning is too expensive. Others feel it is unimportant, and their possessions will be passed on to their loved ones at their death. Many people even think estate planning ends with a will and that an estate plan should take the same format for every individual. But all these are fallacies, myths that need to be put away. Some even fail to make many crucial considerations determining the form of the estate plan. 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 an estate planning lawyer in Bergen County. He has your best interests at heart and will enlighten you on several issues regarding your estate that you may not have considered.
Top mistakes to avoid
The following are mistakes to avoid in your estate plan:
1. Not planning for disability
About 70% of people over 65 likely would need long-term care. 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 that can be traumatizing for your surviving families and incur 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, or have a new child or asset, then there is a 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 to receive the whole value of the proceeds.
5. Putting a child’s name on the deed to your tangible property
When you do this, you indirectly place a taxable gift in your child’s hands. If you need to pass a home to your child, discuss with your estate lawyer 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 select the best-fit executor for your estate.
7. Delay
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 alone, especially when you have complicated assets and assets in multiple states and must 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. The legal professional can guarantee that your estate plan is in line with state laws and that it clearly represents your desires and wishes for the future. Not contacting an estate attorney means you’ll be ignorant of several estate planning issues. This is the gravest mistake you can make regarding estate planning, ultimately leading to all other errors.
