5 Worst Estate Planning Mistakes You Can Make
Planning for how your assets will be distributed after you die can be complicated. You may worry about how the ones you leave behind will be impacted. Fortunately, you can begin planning your estate as early as your 18th birthday.
An estate plan is the surest way to direct your assets to the people you intend without incurring undue stress. With the help of an experienced lawyer, you can develop a plan that takes care of your loved ones and avoids costly mistakes.
Estate Planning Mistakes and Their Consequences
Since everyone’s financial situation is different, no two estate plans are alike. Estate plans are also subject to tax laws, which change frequently.
Unintentional mistakes can leave an estate difficult to administer after you die and can also cost a lot of money. Here are the top five mistakes people typically make:
- Thinking you’re too young to have an estate plan: Many young adults have checking accounts, savings accounts, and life insurance policies. Do you have named beneficiaries on your accounts? If you get married or start a business, your assets could also change considerably. An estate plan can help account for these life changes.
- Choosing the wrong personal representative to administer your estate: Serving as an executor is a big responsibility. Make sure that the individual that you want to handle your estate is willing to do it correctly. You need someone who will carry out your wishes, is trustworthy, organized, local (if possible) and who has good financial sense.
- Not having a will or powers of attorney: Without a will, health care power of attorney, or financial power of attorney, you leave your fate — and the fate of your assets — up to the courts. Decisions will be made at the discretion of the state, which may not match up with your own wishes.
- Forgetting to update your estate plan: Your life circumstances will change. What if you get divorced or the person you appointed as your personal representative dies before you? You need to be sure that you remember to revisit your estate plan to make sure it still reflects your current circumstances.
- Not finding a way to minimize estate taxes. You can legally make gifts in your estate plan to reduce taxes and protect your assets. This means that there will be more available for distribution once you pass away.
How an Estate Planning Lawyer Can Help Avoid These Mistakes
Your estate planning lawyer can give you a comprehensive view of how your affairs will be administered upon your death. This will help you understand the decisions that you will need to make. There may be considerations that you never even thought about.
Examples of what an estate planning lawyer can do include:
- Ensuring that your plan conforms to Arizona law
- Making sure that you have important documents in place, such as a will, living will, revocable living trust, and medical power of attorney
- Helping you manage complex family situations
- Discussing the tax implications if you have a large estate and significant assets in retirement plans or IRAs
- Helping support you in making decisions that don’t always feel comfortable, but will be in everyone’s best interests in the long run
Why You Should Choose Brown & Hobkirk, PLLC
Brown & Hobkirk, PLLC has represented clients in Scottsdale, Phoenix, Chandler, and Tucson for more than 20 years. We can help develop an estate plan that alleviates stress for you and the ones you love. Call or contact us today to get started.
Robert Hobkirk is a partner at the law office of Brown & Hobkirk, PLLC. He represents clients in legal matters involving trusts and estates, wills, probate law, and estate litigation, among other areas.