Often ignored by most people and seen as something the rich people do, estate planning is more important than one would guess. Estate planning is simply advanced planning for the management of your estate, your property after you are no longer capable of managing it yourself either due to some unavoidable circumstances, sickness or death.
The plan involves making several critical decisions like deciding on a power of attorney, assigning your deeds to beneficiaries after you, creating a will abiding by all the legal provisions. Depending on the area you live in, you can find highly qualified attorneys at a reasonable cost.
Here, in Israel, estate planning attorneys near me provided many options and packages for estate planning. However, a lot of people take it to be a DIY project and attempt estate planning by themselves which is a huge mistake. But other than not having an estate plan at all, there are a few mistakes people tend to make that should be avoided:
1. Including Minors in Your Will
While it may sound like a far-future planning, including minors in your will is way more complicated than you think. Whether it’s insurance money or the piece of property you want them to have, minors cannot be handed such big sum of money and thus the asset or money will be handed to the guardian chosen by the court. Chances are, this guardian may not be the person you would want to hand over the assets to.
Thus it is advisable to take care of other specifications if there’s no other way but to include minors in your will of deeds.
2. Not Updating Your Will Regularly
As times change, so do your assets, your property as well as your preference and availability of beneficiaries. But a lot of people tend to not deem it important to update their will of deed. Moreover, some assets have defined beneficiaries and are thus not affected by what you wrote in your will. For example the life insurance cover you took years ago and named your spouse your beneficiary, would go to your spouse even if you will it to go to someone else. Update the beneficiary designation in the assets and match them with what you write in your will.
3. Not Knowing What Each Document That You Sign Says
More often than not, common people tend to not read through the documents carefully before signing them. While trusting your attorney is a good practice, it is important to know what the papers say before you put your seal of approval on them. Estate planning can go horribly wrong if you are not clear on what you have agreed to. Make sure you ask your attorney the details of the plan and understand them carefully before finalising and signing the papers off.
4. Not Considering Tax Liabilities
Tax liabilities are a huge deal when it comes to estate planning. From income tax to estates tax, there are multiple tax liabilities that your deeds could be subject to. Make sure you see through the tax aspect detailing who shall pay which tax and how. Even your life insurance or IRA proceeds may be subject to Income tax and the beneficiary may have to pay a huge amount to pay them.
The above mentioned are some of the most commonly made mistakes in estate planning. SOme others include unclear details in special cases like a beneficiary with special needs, having property in co-ownership, not creating a trust for your insurance proceeds and so on. The only way to avoid these mistakes and device a plan that covers all the legal and financial aspects is to hire an experienced estate planning attorney. Not only can a good attorney help you cover all legalities involved but can also make sure proper framing of the plan as well with regular updation.