Your estate plan should be, at a bare minimum, a set of legal documents that provide instructions for how your assets are to be handled after your death. Although mistakes in any legal document can create a significant problem, a mistake in your estate plan can be catastrophic because you will not be here to correct it when it is discovered. For this reason, it is crucial that your estate plan be mistake-free. To ensure that your estate plan does not include some common mistakes, take the following steps:
- Stay away from boilerplate estate planning forms. In the 21st century, it is easy to find a fill-in-the-blanks Last Will and Testament or even a trust document; however, there is no guarantee that it will be drafted properly, that the information is current, or that it even applies to your state of residency or your specific set of circumstances.
- Be sure that you understand property ownership laws. Joint ownership comes in many forms. Titling property the right way can mean the difference between your spouse/partner/child receiving the property quickly and without hassle and having to wait for months while the property goes through probate, only to lose it in the end to estate taxes.
- Plan for tax and probate avoidance. Your estate can lose a huge chunk of assets to taxes and a significant amount of time to the probate process if you fail to plan ahead and utilize tactics that will avoid, or significantly decrease, both of these.
- Update your plan. Once you have created your plan, be sure to update it regularly. Laws change, people change, and life changes – all of which may require corresponding changes to your estate plan.
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