Estate planning does not only help to protect your assets but also protects your loved ones when you die. However, mistakes can arise in the course of estate planning which could lead to significant problems in future. It may result in confusion, disputes or even financial losses either for you or your loved ones.
Thus, it is important to understand the common mistakes that you can make in estate planning and how to avoid them. This article outlines common mistakes that you need to avoid to ensure that your estate planning process goes smoothly without raising problems and confusion in future.
Four mistakes to avoid in estate planning
– Lacking a will
A grievous mistake in estate planning is delaying to get a legally-binding will. It is in the will that you will get a chance to specify how your assets will be distributed to your loved ones when you are dead. You can also specify on will on who will be running your assets should you be incapacitated to do so. Writing a will does not depend on your age or the quantity of assets that you possess. If you pass away without leaving behind a valid and updated will, it is the state that will decide how your assets will be distributed among your family. This may not reflect what you had in mind when you were still alive so it is reasonable to always have an updated will.
– Failure to update your will
Whatever happens in your life that can either increase or decrease the value of your assets needs to be updated on your will. This also applies if you get a newborn or a family member that you wish to include in your will. So, you must always update your will whenever such changes occur to reflect your current position. An up-to-date will leave no room for confusion or disputes among your family members and makes the probate process more straightforward.
– Ignoring tax implications
Failure to properly plan for taxes can result in significant losses for your assets. Upon your demise, much of the assets will be used to settle the accrued taxes, leaving your family with only a small share of the portion. Therefore, you should liaise with a lawyer to help you in planning for your taxes and minimise the impact on your estate.
– Choosing the wrong executor
An executor is simply the person who will ensure all your wishes have been fulfilled after you are dead. When choosing an executor, ensure that they are up to the task with crucial aptitudes like trustworthiness, integrity and organization. Additionally, the executor should be someone who can spare the time to attend to important matters in your estate planning should they arise. You should take your time to find the right executor to ensure that your wishes are respected and your loved ones are left in good hands.
Estate planning is a crucial process that aids in securing your assets and protecting your loved ones when you are dead. This article provides some of the most common mistakes that people tend to make when undertaking estate planning that can turn out to be costly in future. You should always get in touch with a reliable lawyer to help you in planning and ensuring that all your assets are well managed. Always keep taxes in mind since they can end up taking most of your assets. Find out more from https://cgw.com.au/expertise/succession-and-estate-planning/.