Families in New Jersey and elsewhere have likely heard just how important it can be to have an estate plan. Estate planning can help beneficiaries as well as the owner of the estate — the plan can give instructions on how that person wishes certain medical and legal decisions to be made. There are some common errors that many families make when creating their estate plan, but there are ways to avoid the confusion.
The simplest mistake to understand is that some families will not create an estate plan in the first place. Failure to have one or putting off creating one could have negative repercussions that might not be immediately evident, but can affect the estate owner as well as those they care about. If a plan does exist, the will needs to be updated regularly. An important consideration is who the executor of the estate will be — someone who is personally connected to the owner might not be able to think objectively about his or her best interests. Also, planning for one’s death is not the only reason to have an estate plan — some folks need them if they become disabled or otherwise unable to care for themselves.
Another consideration is whether the estate owner wishes to make any gifts from their estate upon their passing, and whether those gifts go to a person, charity or business. Doing so can reduce the amount of estate tax that will need to be paid and potentially leave more money for heirs. Similarly, it is best to bequeath a home through an inheritance, rather than having one’s child listed on the deed to one’s house. Doing so could cause the child to have to pay a large amount of taxes.
There are many more considerations when a person is handling estate planning. No matter what, creating a detailed estate plan can give one peace of mind that their loved ones will be cared in the future.
Source: estate.findlaw.com, “Ten Common Estate Planning Mistakes to Avoid,” July 25, 2014