How to Avoid the Top 10 Estate Planning Mistakes

We only die once, which usually means that we only need to establish our estate once as well. However, when we only do something one time, we do not always get it right, and, in fact, we usually miss more than one thing. This is why we want to show you how to avoid the top 10 estate planning mistakes.

1.  Procrastinating – Thinking you Have all the Time in the World

We don’t like to think that we are ever going to die, but the time eventually comes for everyone. This is why you should never procrastinate your estate planning. Even if you don’t think you have any finances to plan for, chances are you high that you have something you want to leave to a loved one.

2.  Don’t Think of the Long-Term Wellbeing of loved ones

On that note, we would love to be able to leave our loved ones a lot of money so we know they are safe. However, this is not always the right thing to do. Sometimes a trust fund is the answer rather than a lump sum.  It depends on the person and situation.

3.  Don’t Take Everything Into Consideration

Sometimes we invest ourselves in one set estate planning approach, and do not think of the big picture. You need to consider all the what-ifs.  There are three components to looking at the big picture and these are:

•  People: This includes you, your spouse, children, grandchildren and other relatives.

•  Property: This includes all your assets and wealth – personal property, real property, investments, money, potential inheritances, and retirement funds, as well as what you own now, and might own in the future.

•  Process: This means how to develop your estate plan to ensure you optimize management initiatives, techniques and legal entities to achieve your long-term goals.

4.  Not Planning for Divorce

With estate planning, we often don’t think that we might divorce our spouse, but sometimes it happens. This is where a contingency that places restrictions on money distribution outside the family is required; as well as other considerations.

5.  Not Planning for Disability

An unexpected disability has a great impact on our personal and financial affairs. Therefore, deciding who will handle finances, childcare and healthcare decisions is important.  It is never too early to plan for a potential long-term disability because it only takes a second for an accident to happen.

6.  Don’t Keep Documents up to Date

Often the importance of updating documents is overlooked, but it is imperative to estate planning in Los Angeles or anywhere in the United States. This includes your will, title documents, and numerous other assets.  Always make sure you have everything up to date.

7.  Underestimating Trusts

Trusts are not only for minor children; they are a way to protect assets that involve the whole family—and these assets need protection from creditors.

8.  Not Including Digital Assets

We live in a digital world where we make money online, and if you don’t have the password, you cannot get into digital accounts. This is why someone needs to have a list of all your online usernames and passwords; in particular, your PayPal account.

9.  Not Thinking of tax Consequences

It is sometimes easy to forget about the big bite taxes takes out of estates. This also applies to life insurance policies. You should transfer life insurance policies to a life insurance trust.

10.  Doing it Yourself (DIY) to Save Money

Although the DIY mentality is excellent for some things, it is not ideal when it comes to estate planning (https://en.wikipedia.org/wiki/Estate_planning). It may seem like perhaps you are saving money, but in actuality it is probably costing you money. Estate planning is one instance where you need an expert on your side.

Professional estate planners are experienced in not only managing estates, but dealing with estate planning issues as well. They know how to avoid the top 10 estate planning mistakes because they are involved with estate planning every day.

If you choose to do your own estate planning rather than hire top accounting firms, make sure that you avoid the mistakes discussed here.  The last thing you want to do is miss something, or not complete the right paper work. The whole purpose of estate planning is to make sure your loved ones are cared for exactly how you want them to be.