Many people work hard their entire lives to be successful, and they care about how their money and assets are distributed after they die. For many, it’s important that those assets go to the people they care about most and to the causes they believe in. An estate plan is the legal tool you use to ensure that your estate goes to the beneficiaries you designate. However, there are a few common mistakes to avoid along the way to make sure that your beneficiaries receive your final gifts the way that you want.
Six Biggest Estate Planning Mistakes to Avoid
- Not having a will. A will is your primary document for making your estate wishes clear and explicit for when you are gone. Without a will, the state will get to determine how your assets are distributed. If you want to ensure that your family is protected the way you want, creating a will is your first step to making this happen.
- Not using a trust. Whether you chose a revocable trust or an irrevocable trust, a trust is an important tool for transferring assets to your heirs. Many assets can be passed directly to the recipient, bypassing the probate process entirely. Certain kinds of trusts can even exclude assets from the final taxable valuation of your estate, potentially saving your heirs money in estate tax. Trusts also offer a significant privacy advantage: while your will eventually joins the public record, your trust documents are kept entirely private.
- Not choosing your trustee wisely. Trusts are great tools, but it’s important to choose the person responsible for managing your trust carefully. By choosing a family member, you might be inadvertently putting him in an uncomfortable position when it’s time to distribute assets, especially if there’s potential for a dispute over the estate. A third-party trustee costs a little bit of money, but it might be helpful to ensure that everybody will be satisfied that the trustee is truly acting without self-interest.
- Not updating your estate plan regularly. It’s a mistake to think that your estate plan is a one-time document. Lives change over time, and social networks grow and shrink with weddings, divorces, births, and deaths. Property is bought and sold, cash is earned, invested, and spent again. Major life events should always trigger an evaluation of your estate plan to make sure it’s exactly the way you want it. Be sure to re-assess your plan at least annually. It doesn’t take long, especially if nothing has changed, but getting in an annual routine can help you remember to keep it current when things do change.
- Not having an estate plan. By not having an estate plan, you’re making the biggest mistake of all. Your assets will go through probate—a time-consuming and expensive process. Your heirs stand to lose a significant portion of your gift through fees, and your estate’s tax liability may be far greater than it could be. The state’s laws of intestate succession will decide who gets your assets, no matter how unfair the distribution or what your wishes were.
- Not getting professional help. Many people think they can create an estate plan on their own with just a few forms downloaded off the internet. While you can get started that way, an attorney with years of experience making estate plans can guide you through the entire process. Your lawyer will make sure that your plan is bulletproof and really meets the needs of you and your family, so that your wishes will be respected when you are gone.
Start Planning Your Estate Today
At the Law Offices of Molly B. Kenny, we have over two decades of experience helping people across the state of Washington with estate planning, probate, and other family law issues. Whether you’re married, single, or in a domestic partnership, we would be happy to serve you. Start planning for tomorrow by calling us at (425) 460-0550 to arrange a confidential consultation here in our Bellevue office.