By taking the time to create a will, you’re already avoiding the biggest estate planning mistake of all, which is to fail to create such a plan. However, there are other common mistakes people make when creating their estate plan. Read on to learn how you can avoid these mistakes.
Putting your heirs’ names on the title to large assets
By listing your heirs’ names on the title to assets such as a bank account or home, you can keep that asset from going through the probate process, ensuring it immediately becomes your loved one’s property. However, this may not be the best way to help your heirs avoid probate. Transferring a large asset in this manner could have gift tax consequences. Additionally, if you’re leaving the asset to a young heir, making a direct gift without placing any limits on how the funds are used or distributed could have unintended consequences.
Failing to consider placing your assets in trust
Rather than listing your heirs’ names on large assets, consider placing those assets, and others from your estate, into a trust. Trusts allow your heirs to avoid probate while also providing you with a way to control when and under what conditions the funds are distributed. Trusts may also be a way to avoid certain taxes placed on inherited gifts.
Neglecting to make regular updates to your estate plan
If you create a will when you’re still young and active (as you should), you’re bound to experience a number of significant personal events such as divorce or the birth of grandchildren, and to acquire additional assets you’ll want to pass along to your heirs. In order to ensure that your will remains an accurate representation of your wishes, you’ll need to return to your estate planning lawyer at regular intervals or upon the occurrence of a major life event in order to update your will. Additionally, if you’ve created a trust, you’ll need to ensure that any new property you acquire that you wish to be in the trust is titled with the name of the trust.
If you’re in need of a seasoned and detail-oriented estate planning attorney, contact the Poughkeepsie wills & trusts lawyers at Van DeWater & Van DeWater for a consultation, at 845-452-5900.