Five Common Estate Planning Mistakes

Five Common Estate Planning Mistakes

estate planningEstate planning is complex. Mistakes may be very costly. It is a wise idea to use the services of a competent Orlando estate planning attorney to help manage these affairs properly.

Here are five of the most common mistakes:

Mistake Number 1 – Not Planning

The first mistake is not doing any estate planning. That is an enormous mistake. We have all heard the stories about the wealthy person who dies without a will. In this circumstance, passing away without an estate plan in place could lead to a legal dispute that could very costly, very emotional, and could drag out for decades. A simple will could avoid tying up an estate in ligation for years.

One common misconception is that estate planning only helps others after you die. Estate planning is an extension of retirement planning. Working with a qualified estate planning attorney in Florida helps you set up your retirement plans and your estate so that they work together smoothly.

Mistake Number 2 – Not Understanding Tax Strategies

The tax code is complicated. Your attorney can work with your CPA, insurance agent, and financial planner, if you have them, to structure certain transactions in such a way as to minimize the tax burden.

Mistake Number 3 – Not Preparing for Emergencies

Sound estate planning advice includes the evaluation of any potential emergencies in order to effectively mitigate the risk if they occur.

If you are part owner of a small business, estate planning includes having a written plan about what happens if you suddenly die or become legally incapacitated. A business can fail if it cannot operate, and such failure can trickle down and affect others such as your employees or your customers. Ask your attorney about creating a “sudden-death, buy-sell” agreement to avoid this problem.

Another important consideration is the ability to use a living trust to transfer assets immediately upon death to a spouse or another relative without the estate having to go through probate. You may want to work with an attorney to set up a revocable trust that can be undone if the need arises due to an emergency.

Mistake Number 4 – Losing Control of Assets Prematurely

At times, it may not be wise to name your spouse or your children as joint-owners of your assets because if something goes wrong either with them or in their lives, either they or their creditors could attempt to attack your assets.

Mistake Number 5 – Forgetting to Update Estate Planning

It is vital that your estate planning is reviewed regularly to make sure it is up-to-date with any life changes you experience, such as getting married, having a baby, getting divorced, buying or selling real estate, buying or selling stocks, buying or selling a business, making other investments, and contributing to retirement accounts.

One common error is to update a will but not change the beneficiaries on any life insurance policies, retirement accounts, or other annuities you may have, which pass outside of your will.

At a minimum, you should have an annual review with your attorney to make sure everything is current and have an interim review if there are any substantial changes to your circumstances during the year.

For all your estate planning needs, contact Nishad Khan P.L. for a private, professional consultation.

The Orlando Real Estate Attorneys at the Law Offices of Nishad Khan P.L. serve clients with Residential, Commercial, and Investment Real Estate Transactions. Let our expertise in Central Florida Real Estate help you.