You know that having an estate plan is vital to protecting your assets and heirs after you are gone. According to Kiplinger, avoiding estate planning mistakes is equally important when it comes to your assets.
While professional assistance is best when estate planning, it also helps to have the right information. Here are a few ways you can avoid errors.
Update your estate plan as needed
Your entire estate plan must grow and evolve with your life. Check over documents after a new marriage, divorce, the birth of a new child, relocation to a new state, and all other significant life changes. You must also check beneficiary designations on life insurance policies and retirement accounts when reviewing your estate plan. The information contained in these accounts will supersede information found within other documents.
Make sure you understand asset ownership
Ownership of your assets is a major concern when estate planning. For instance, if you place assets into a trust, the trust now owns those assets. That means titles and deeds require updating to show ownership by the trust. If you co-own property with your spouse, the rights to that property revert to the co-owner, i.e. your spouse after you die. If you attempt to reduce your tax burden by gifting heirs your assets, keep in mind the IRS will levy a gift tax in this case.
Select a guardian for minor children
In addition to creating a plan for your assets, wills also allow you to name a guardian for minor children in your care. If you fail to name a guardian, the court will appoint one on your behalf should the unthinkable happen. While the court makes all decisions related to children in their best interest, parents still prefer choosing a guardian using their own criteria.
When choosing a guardian, select a person that exhibits responsibility and accountability. The person you choose should also have the capacity to love and care for your children as you would.
