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Top 5 Estate Planning Mistakes

Just about everyone should have an estate plan. If you have accumulated any possessions, you will want to have a plan in place for how to distribute these assets.

However, estate planning can be complicated -- even you don't have a substantial amount of assets -- and below are what we think are the top five estate planning mistakes to avoid:

  1. Not having an estate plan. Of course, not having an estate plan at all is the biggest mistake you can make. We wrote before that death unexpectedly happens to even the fittest and the youngest. Without an estate plan in place, your personal and financial affairs will be left to impersonal state rules.

  2. Not updating your will. Just because you follow our advice and write a will early, this does not mean you're out of the woods yet. Life happens, and your circumstances will change. As you get older and accumulate assets, children, and grandchildren, you will want to adjust your will accordingly.

  3. Not planning for disability. Dying is not the only reason to have an estate plan. A disability can often have greater consequences on your personal and financial affairs. Decisions such as who will handle your finances, raise your children, or make healthcare decisions on your behalf are extremely important. So, you will want to account for these decisions in your plan.

  4. Not reducing your estate tax. Estate planning is often a good way to reduce your tax obligations. Limited gifts to your children and spouse may be made free from the estate tax.

  5. Putting your child's name on the deed. Directly above, we said to consider giving gifts. But watch out for large gifts. Sizable gifts to your children may be subject to tax, and so putting their names on a deed to very valuable property may burden them with a tax obligation they cannot pay.

Estate planning can be complicated. To help avoid the common estate planning mistakes, you may want to contact an estate planning attorney.

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