An estate plan is a set of important legal documents that explain how you want your estate to be managed when you pass away or during an emergency. Since your estate plan will ultimately determine how your assets will be distributed, you must take the appropriate steps when you create your estate plan. Our Metro West Boston estate planning attorneys explain the most common estate planning mistakes people make and how to avoid them.
If you have questions about creating your comprehensive estate plan, contact our Metro West Boston estate plan lawyers today at (800) 828-7854 to schedule a consultation!
#1: Not Having a Comprehensive Plan in Place
One of the most common mistakes that people make is not having a comprehensive plan in place. Even if you do have an estate plan, a poorly designed plan may be of little help to your beneficiaries down the road. Every person’s estate planning process will be different because it should be tailored to their specific needs. You should learn more about what your estate plan should entail to protect your assets and your loved ones.
#2: Failing to Update Estate Plan
One of the biggest mistakes that many people make is failing to update their estate plan. Estate plans should be updated after a major life event, when your goals shift, or when new laws can affect your estate plan structure. For example, major life events requiring an update on your estate plan include moving to another state, getting married, or having a child. Recent changes to IRA rules may also require updating your estate plan.
#3: Not Preparing for Estate Tax Liability
Another common mistake people make is failing to prepare for estate tax liabilities. There are various ways to reduce estate tax liabilities, so it’s important to be vigilant with new estate tax laws and take the necessary steps to reduce liabilities.
#4: Not Including Disability & Long-Term Care in Your Plan
No estate plan is complete without planning for disability and long-term care. It is essential to be prepared in the event of an unexpected injury or accident. You should consider including a power of attorney in your estate plan to protect your assets in the event of an emergency. You should also start looking into medicare planning, assisted living expenses, and long-term health care planning.
#5: Failing to Educate Yourself About Income Taxes for Beneficiaries
The tax laws can get complicated when it comes to inheritance and estate planning. For such reasons, you should seek legal guidance to understand how heirs can limit their liabilities through their income tax. Since IRAs inherited by an adult or child is subject to required minimum distributions, it can impact the beneficiary’s tax situation. This means that their inheritance can be taxed at the highest marginal tax rate during peak earning years--ultimately decreasing the amount of wealth passed down.
How Can I Avoid Estate Planning Mistakes?
It can be difficult to avoid estate planning mistakes without having strong guidance. The best way to avoid estate planning mistakes and create the most comprehensive plan is by contacting an experienced estate planning attorney. Our team at Marsden Law P.C. has been helping clients determine which types of trusts, powers of attorney, and healthcare directives they need in their estate plan to ensure their legacies and loved ones are protected. Our team can help you ensure that you have the documents you need to be finalized and executed--limiting the number of mistakes you make and helping you keep your plan up to date.
Contact our Metro West Boston estate planning lawyers today at (800) 828-7854 to schedule a free case consultation!