Creating your estate plan is the only way that you can ensure your loved ones know exactly what you want to happen with your estate after you pass away. Getting this in order as quickly as possible helps to ensure that they have the legal backing to follow your wishes.
There are several errors that are commonly made while people are working on their estate plan. Knowing these can help you to avoid them as you’re making your own estate plan.
Passing property by putting your child’s name on the deed
Your child will have to pay a gift tax if you try to pass property onto them by putting their name on the deed. Any gift that’s more than $14,000 per spouse is taxable. Instead of using the deed to give them the property, you should include the property in your estate plan so they can receive it as an inheritance. Review the applicable tax laws to determine how you can plan for your heirs to receive as much of your estate as possible.
Failing to update the terms of the estate plan
You need to review the estate plan periodically so you can ensure that it accurately reflects your wishes. Ideally, you’ll do this after major life events, such as births, deaths, marriages, divorces, or changes in assets. It’s also a good idea to go over it every couple of years so you can be sure that the correct parties are receiving assets and that other designations, including the power of attorney, are still accurate.
Anyone who’s creating an estate plan should ensure that it accurately reflects their wishes in a way that’s enforceable. Working with a professional who’s familiar with situations like yours can help to take the stress out of the planning process.