With the New Year almost upon us, many people will be making resolutions to lose weight, stop procrastinating, eat healthier, stop smoking, and so on. Maybe, just maybe, some people out there will also be planning on finally getting around to getting their affairs in order and doing some estate planning.
Neglect of estate planning is something that is more common than one might expect, even among those who should know better. A recent article for Wealthmanagement.com listed some examples of famous estate disasters that demonstrate the potential consequences of failing to properly plan. These examples should be a reminder to us all to be proactive about estate planning.
As important as it is, though, to engage in estate planning, it is also important to ensure that the planning itself is done wisely. A number of pitfalls exist along the way. One of them is failing to update and maintain the estate plan. This is critical, because the circumstances under which the plan was created may change. It is good to periodically review one’s estate plan to ensure one’s goals are being accomplished.
Another mistake is not taking the steps to avoid probate where possible. Probate can be an expensive and tiring process, and it is worth it to avoid dealing with it where possible. Disability and nursing home planning being important aspects of estate planning, it would also be a mistake to leave these matters out of the picture. Proper planning would include getting disability documents in place and communicating with one’s family about one’s plan.
Of course, avoiding taxes is a big part of estate planning, and inadequate planning around this issue can leave one’s estate responsible for a significant tax bill. With the coming changes in the estate-gift tax exemption, this aspect of estate planning will be going through a big shift in the coming year, and will require extra attention.
These are just some of the estate planning matters that warrant careful attention and thorough planning, but there are others. Working with an experienced attorney is important in navigating these issues and ensuring a good estate plan is put in place.
Source: wealthmanagement.com, “Lessons of the Rich and Famous…in Death,” Jim Moniz, December 24, 2012