Six Common Estate Planning Mistakes to Avoid
You will need help from a certified estate planner to avoid these serious estate planning mistakes. These mistakes can place a lot of burden on those you will leave behind and yet they can be easily avoided.
Watch out for these common estate planning mistakes;
Failure to plan at all
This is arguably the worst mistake to make. It’s disturbing that up to up to 60% of Americans don’t have a will. Without a will, it is difficult to protect your hard-earned possessions, let alone your loved ones. The interstate laws of Ohio will resolve who becomes heir to your assets when you don’t have a Will.
Not planning for Estate Taxes
It’s possible to protect up to $4 million from State of Ohio estate taxes with proper estate planning. An estate planning firm can help you with this. In bigger estates, a family can protect property from estate tax using revocable life insurance trusts, qualified personal residence trusts, charitable trusts and family limited partnerships. Failure to plan may result in excessive estate tax dues.
Failure to plan for Incapacity
This deals with estate planning and to a small extent distribution of assets after death. An expansive estate plan starts with planning for your own incapacity. In most cases, you will have to name a health care representative who will make health related decisions on your behalf. You ought to have a living will as well. This will rule out uncalled-for life support. You should also have a living trust that will take care of your affairs when you can’t perform your tasks.
Not Naming a Guardian for your minor children
It’s advisable that you have a guardian to look after your young kids in case you are not able to do so. As witnessed after the death of Michael Jackson, it’s important to legally appoint a guardian in your will.
Failure to plan for Life Insurance
Life insurance is an absolute must if you want to support your spouse, look after your loved ones and continue to pay estate taxes when you pass away. Most people assume that life insurance is tax-free. In any case, a certified estate planner will help you structure life insurance to get around estate taxes and still implement your goals through a correctly structured “Irrevocable Life Insurance Trust”.
Failure to plan for “Out of State” Real Estate
If you a resident of Ohio and own real estate outside the state of Ohio, you may have to undergo a probate proceeding in order to transfer title to real estate in another location. If you make all the legal plans in advance, you can prevent this situation from happening.
