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Estate planning laws aren't a big deal until they become a really big deal. That's why you want to make sure your final wishes are carried out. You also want to be certain that you don't make estate planning mistakes.
Drafting a will can be vital even if you don't have many assets. It can help you map out who gets what after you pass on. And it can help your heirs.
So what are some estate planning mistakes you should avoid?
1. Thinking you don't need an estate plan.
Nobody knows for certain when they will die. Young individuals might think they don't need a will or estate plan in the first place. Yet there's no telling when tragic accidents may strike. It may be an error not to consider an estate plan at all.
2. Not considering disability.
You might want to consider creating in a power of attorney or a living trust. It will be easier for others to make healthcare decisions for you if you are unable to.
3. Not trying to reduce your estate tax.
There are multiple methods you could use to reduce your estate tax burden. One way is to give gifts to your spouse or to your children. Up to $13,000 a year per spouse may be excluded from estate tax under the IRS code.
4. Forgetting to update your will.
Recently divorced? Had another child? Or, did someone close to you die? These are all reasons you should update your will.
5. Deciding not to transfer your life insurance to a trust.
Life insurance proceeds are subject to taxes. You could set up a life insurance trust. This would avoid potential estate taxes.
Of course, you might want to consult with an attorney that specializes in estate planning law to discuss your specific situation. Estate planning mistakes are avoidable. They may also be remedied with the right assistance.