Estate planning can help maximize the value of your estate, reduce tax liability, and ensure that your desired beneficiaries will receive the assets that you’ve worked so hard to accumulate during your lifetime. It’s something that everyone should have in place, not just the rich. No matter what your circumstances, it’s possible to make mistakes during the planning process. Here are a few common Massachusetts estate planning mistakes to avoid.
1. Failing to Plan for Disability
When it comes to estate planning, most people plan for their deaths. However, disability can have as much of an impact on your family as death would. It can affect your ability to earn a wage, care for your family, and make important personal, medical, and financial decisions. Failing to plan for disability is one of the most common Massachusetts estate planning mistakes to avoid. Fortunately, there are ways to protect against both short-term and long-term disability in a well thought out Massachusetts estate plan.
2. Not Reducing Estate Tax Liability
No one likes to pay taxes! You may do a great job minimizing tax liability while you are living, but don’t forget to focus on potential taxes to your estate after death. Legal structures, such as trusts, can help you avoid taxes or minimize them, at the very least. There are also other options to consider, such as tax-free gifts.
3. Leaving Assets to Minor Children
Parents naturally want to leave assets to their children. However, leaving assets directly to minor children is a big mistake. In most cases, your children will not have access to those assets until they reach legal age. How will they survive until then? It is critical to structure your estate properly for children so they can receive critical financial support. We previously covered 4 things to include in your estate plan if you have children that provides a brief overview.
4. Selecting the Wrong Person to Manage Your Estate
Estate plans often include someone that you designate to manage your affairs. Most people select family members or trusted friends. Selecting the wrong person can be detrimental to your estate, especially if that person is unable to make sound financial decisions or act objectively. There is an option to select an independent third party to manage your estate. Although this may upset some family members, it may be the right decision for protecting your estate for the benefit of those same family members.
5. Failing to Make Changes
An outdated estate plan can be as bad as no estate plan. Estate plans are not something that you do once and forget about. They must be updated annually to reflect important changes in your life. Failure to do so can negatively impact your intended beneficiaries or lead to prolonged and expensive court battles. It is therefore one of the biggest Massachusetts estate planning mistakes to avoid. Make the most of your estate plan by keeping it current.
More on Estate Planning Mistakes to Avoid
Now that you know a few key Massachusetts estate planning mistakes to avoid, you’re one step closer to proper estate planning. Every individual is different,… there’s no standard estate plan that works for everyone. If you’re ready to start planning, contact us to schedule a consultation. Our team takes the time to understand your personal circumstances and explain the options available to you. Don’t wait until it’s too late. Schedule your consultation today!