Creating an estate plan is crucial for many reasons, from saving on taxes and making retirement easier to providing for your family. However, many people make a variety of mistakes during the estate planning process, leading to family conflicts and confusion later on. Here are a few pitfalls to keep in mind before meeting with an attorney.
A Guide to Common Estate Planning Mistakes
1. Not Updating Your Documents
Working with an attorney to create estate planning documents, such as a will and trust, is an important first step. However, many people fail to make updates as their life circumstances change. For example, you’ll want to designate new beneficiaries after a divorce or death. If you have a child, it’s crucial to add them to the will. Making these changes will ensure that your assets go to the right people if you pass away. Meet with your lawyer after any major life events or every few years at a minimum.
2. Not Reducing Your Estate Tax
According to the IRS, you can gift around $14,000 per year tax-free to a person or organization of your choosing. If you’re married, that means you can avoid taxes on $28,000 annually. This will result in more money going to family members before and after you pass away, and you can generously support causes you believe in while saving.
3. Picking the Wrong Executor
The executor will have vital responsibilities, including filing for probate, paying off debts, and distributing your assets, so you want to choose someone you trust. Pick a family member or friend who you think will survive you, lives relatively close to you, and is reliable. If you can’t think of a loved one to be an executor or expect family conflicts, choose an attorney instead. Also, select a back-up in case your first choice can’t serve for whatever reason.
When you need an estate planning attorney you can trust, contact Law Office of George N. Nam. Serving Honolulu, Aiea, Pearl City, Waipahu, and Kapolei, HI, Attorney Nam has been helping clients in the area with wills and trusts for almost two decades. He will walk you through every step of the estate planning process, ensuring that you avoid common mistakes, prevent family conflict, and protect your wishes. Call (808) 487-9455 to set up a consultation, or visit the firm’s website to learn more.