Sooner or later, every estate is distributed. It can either be by you and your attorneys according to your wishes, or by the government. The biggest estate planning mistake you can make is to fail to create a will, but there are other critical missteps you can make when allocating your assets for your heirs.
- Failing to account for accidents or other sudden health emergencies: Before you reach old age, it’s easy to forget that accidents or very sudden illness can happen to any of us. Perhaps you’ve put a will together but have neglected to prepare in other important ways for an unexpected illness or passing. When you create a will, also have your attorney create a living will, which will designate someone to make medical decisions on your behalf, such as whether or not to administer life-prolonging treatments or artificial feeding. When you select an executor, be sure to tell that person where you’ve left the will and other important accompanying documents that he or she will need to execute your will. Don’t assume you’ll be able to organize those materials later, no matter how healthy you are.
- Failing to continue updating your estate documents: Planning your estate is an ongoing process. If you forget to update it as your life goes on, you may fail to account for new changes in tax law, moves to new states with different laws, changes in your retirement beneficiaries, or new assets. Periodically review your will with your attorney to ensure that it’s up to date.
- You think your estate is too small for a will: If you’re leaving any assets whatsoever behind, you should be able dictate where they will go. If you leave your assets to be distributed through the intestate process, items that may be precious might not go to the party who would most appreciate them. Perhaps you want to ensure that your nephew receives your father’s baseball collection, or that your daughter receives your grandmother’s jewelry. Unless you work with a thorough estate planning attorney to create a will that accounts for all your assets, you’ll lose control over where these items go. Just because your estate is valued beneath the estate tax exclusion amount, that doesn’t mean you shouldn’t create a will.
- Failing to consider a trust, or failing to properly allocate assets into it: Putting assets in trust can save money and save your heirs from the probate process. Creating a trust can allow your heirs more direct, faster access to their inheritance. However, some people creating a trust don’t realize their duty to place assets into the trust, or they leave out assets they intended to be included. Create thorough records of what assets are intended to be placed in trust, and make sure you carry out the necessary legal formalities.
If you need assistance creating an estate plan in Kentucky, contact the Florence estate planning law firm of Greta Hoffman & Associates for a consultation, at 859-371-2227.