Not only are estate planning mistakes difficult for your loved ones, as they put your family members in a difficult situation after you have passed on, but they can also be unnecessarily expensive. Taking a leadership role with your own estate planning process is one of the only ways to avoid serious estate planning problems that your loved ones will have to cope with after you have passed away. Even a seemingly simple mistake in your estate planning process could have ripple effects that can last well into the next generation.
The biggest mistake many people make is not having a plan at all. The state then determines where the assets go and no matter how much your family argues that you wanted things a certain way, your wishes will impact the decision of the associated courts. No plan leaves important decisions up to the courts and a group of people who don’t know you and your individual concerns and wishes.
As your family situation becomes more complex, it’s even more important to sit down to avoid expensive estate planning mistakes. A simple will might have been sufficient for you when you first got married but once you have children, you’ll need to accommodate for additional issues such as guardianship. Another example includes the accumulation of wealth which requires a more comprehensive tax strategy.
More money is available for your family when you have contemplated how to pay less in federal estate taxes and there are also complex issues such as generation-skipping transfer taxes to be aware of. Always take a proactive approach because there are many different types of estate planning mistakes that cannot be undone after the fact. One final expensive estate planning mistake is leaving behind too much money to an irresponsible spender. Having unrestricted access to vast quantities of money may not be the right move for a specific person but a spendthrift provision or trust can help to avoid these challenges. Planning techniques can ensure that wealth you have worked so hard to create lasts into future generations.