People make all kinds of estate planning mistakes that can come back to hurt them or their families in the future. For that reason, it’s important for you to know your legal rights and to take action to make sure your estate plan is as protective as possible.
Here are five of the most common estate planning mistakes that people make. Learning about these can help you avoid them and make better decisions as you move forward with the estate planning process.
- Not getting legal support
The first mistake many people make is not getting the help of an attorney. Estate planning law can be complex, so you do want to know that you’ve done everything correctly. If you forget to get a witness or fill out a document incorrectly, your estate plan could have aspects of it invalidated.
- Not using gifting to reduce your estate taxes
Your estate needs to be as small as possible to reduce the likelihood of paying taxes. Gifting assets to your loved one during your lifetime could help reduce the estate taxes they’ll face after you pass away.
- Not thinking about long-term care
An estate plan does need to go over your long-term care and health care needs just as it needs to go over what to do after your death. Good estate planning will help you qualify for Medicaid and have protections in place if you are hurt and incapacitated.
- Not updating documents often enough
Your estate plan needs to have its documents updated regularly to keep them valid. Your will needs to be updated at least during major changes in your life, though you may choose to update it more often, for example.
- Procrastinating for too long
Finally, a last mistake is waiting too long to get started. With a Medicaid look-back period, for example, you need to show that you gifted assets several years before you apply. This kind of issue, as well as others, require planning well in advance.
These are five things people do that are mistakes when working on estate planning. If you’re not sure where to start, remember that you can work with someone familiar with estate planning law to begin building your plan from the bottom up.