Estate planning seems easy enough, but looking at it like a simple thing opens up the potential for huge mistakes that can result in potential litigation and financial consequences for the heirs. If you are looking to make estate planning as simple as possible, avoid these mistakes.
No Estate Plan
Your first and biggest mistake is not having an estate plan at all, or at least not an official one. You may be vocal with your wishes, but vocal wishes can’t be legally backed up like wishes on a notarized piece of paper.
Not Making Gifts
I know, what harm could not making gifts do? However, by gifting certain amounts to spouses, you can dramatically lower your estate tax so less of the money goes to the tax man. You and your spouse can give gifts up to $14,000 per year to as many people as you would like without having to pay gift or estate taxes on them. Combined, the two of you could give $28,000 per year to each of your children, which can significantly reduce your estate over time.
Not Creating a Life Insurance Trust
If you have a sizable life insurance policy, then the money from that policy could result in significant taxes for you upon your death. However, if you establish a life insurance trust to act as the owner of your policies, you can avoid estate taxes on the life insurance benefits when you die. This could potentially save your heirs considerable money in taxes.
Unfortunately, there are so many other big mistakes you can make in the estate planning process. If you are starting your estate plan and need the advice and representation of a skilled lawyer, contact us today.