If you own a home and property, it is important that you carefully do your estate planning. Estate planning organizes and determines how the maintenance of your property and assets will proceed after your death. If you don’t do it correctly, you could leave significant burdens to your loved ones after you pass. Here are a few big mistakes that you can make with estate planning.
Not Taking Advantage of Tax Shelters
One of the most common mistakes that people make when doing their estate planning is failing to take advantage of tax shelters. Tax shelters are used to minimize your taxable incomes, assets, or liabilities. Therefore, tax shelters end up saving you money now and in the future. This tax minimization method is legal. Retirement plans or accounts and real estate investments are common examples of possible tax shelters.
Not Writing a Will
Another common issue that many people make when doing their estate planning is not writing a will. You shouldn’t wait until you’re retired to write a will. Of course, nobody plans on dying early or becoming incapacitated unexpectedly. However, you never know what might happen, so it is better to be prepared. Having a will written earlier on in life can protect your children or inheritors from complications that could come after your death. Your heirs will have to go through the probate process if you don’t leave a will. You can save them a lot of time, money, and stress by keeping an updated will from a young age.
A big mistake that you should avoid in your estate planning is forgetting your beneficiaries. You may remember to include your children on your will, but do you have them listed as your beneficiaries on your life insurance policies, retirement accounts, or large estate assets? If you only have you and your spouse as beneficiaries on these policies or accounts, your children won’t be able to have those benefits and assets when you unexpectedly pass. Even if you try to state in your will that your children should inherit these different assets, if they aren’t the specifically designated beneficiaries for them, they won’t have legal access to them.
So, if you’re starting your estate planning, keep these common mistakes in mind so that you can successfully avoid them. Additionally, if you feel that you’re too young to start your estate planning, don’t forget that you can keep your will and beneficiaries updated to be prepared in the case of an emergency. Your future family will thank you for having your estate and affairs so well prepared.
Check out this article on aspects of your financial health you should pay attention to!