Answer: Many people make the same mistakes when it comes to estate planning:
- Not Planning: Although estate planning can be a process, it is necessary and critical to avoid a long and drawn out probate process and unnecessary taxes. By doing an estate plan you can save your loved ones added grief, frustration and expenses.
- Don’t Plan for Estate Taxes: People are often surprised to learn that estate taxes are due within nine months of the date of death, particularly if the estate is largely composed of illiquid assets such as real estate. As such, it’s important that estate plans consider the liquidity necessary to pay this tax, so planning for the estate tax should not be overlooked.
- Poorly Documented Transactions: Often, individuals fail to properly document estate planning transactions, such as gifting, family loans, and intentions regarding same. Without proper documentation, one can undermine their planning.
- Not Updating/Reviewing Your Estate Plan: Your estate plan shouldn’t be created and then forgotten. Rather, you should revisit it every three to five years, or after a major life event (marriage, divorce, new children, purchase, sale or change in liquidity). This review should be done with an Estate Planning Attorney.
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