The largest costs associated with estate administration come from attempting to fix mistakes that were made in the planning process. For this reason, people should be aware of the more common estate planning mistakes so that they can be avoided.
When it comes to estate planning, people tend to make the same mistakes over and over again. Some mistakes are fairly minor. However, other common mistakes can be very costly to sort out when the estate is being administered.
Recently, Consumer Reports published a list of some of the latter mistakes in an article titled “6 costly estate-planning minefields and how to avoid them.”
Their list includes:
- Thinking you are too young to need a will – Since you cannot accurately predict when you will pass away, you can never be too young to get a will.
- Putting everything into joint ownerships – When you put property into joint ownership, you give the other owner and his or her creditors equal rights to the property.
- Forgetting a will doesn’t do everything – Many things such as life insurance and retirement plans are not covered by wills.
- Allowing your legacy to be squandered – Many inheritances are spent quickly if proper safeguards are not in place.
- Igniting sibling rivalry – Your estate plan should not cause your children to feud.
- Making things too complicated – You might not need a complex estate plan. You should speak to an attorney about getting the appropriate estate plan for your needs, not necessarily the latest, complex estate plan.
That last bit of advice is likely the most important. Work with an experienced attorney who has seen it all and can help you avoid estate planning pitfalls.
Reference: Consumer Reports (April 14, 2015) “6 costly estate-planning minefields and how to avoid them.”
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Publish on: 04-Apr 27, 2015