With so many moving parts and critical factors, creating an estate plan can only prove beneficial if completed correctly. Unfortunately, many people make common mistakes that can lead to significant issues for their heirs and loved ones. To help you ensure the success of your process, our estate planning lawyer McAllen has prepared insight into these common pitfalls and the best ways to avoid them. No matter where you are, having an estate plan is one of the best ways to secure your legacy and protect your family’s future. At Fryer and Hansen in McAllen, we understand that the estate planning process is as essential as it can be complex.
Failing to Create an Estate Plan
The most apparent mistake to make in an estate plan is not creating a plan at all. It’s not uncommon for people to assume their assets will automatically go to their loved ones without formal documentation. Others believe the amount of assets they own is insufficient for an estate plan. Whatever the case, it’s important to remember that without a trust, your estate will be subject to state intestacy laws that may not align with your wishes. If you want to avoid these issues for the ones you love, creating a comprehensive estate plan that outlines how your assets should be distributed is crucial.
Failing to Update Your Estate Plan
Let’s say you do have an estate plan in place. However, you may have gone through significant life changes in the years since you created it. Perhaps you’ve welcomed a new child or divorced your spouse. These life events should prompt a review and update of your estate plan. Doing so helps ensure that your most up-to-date wishes and circumstances are appropriately reflected. In most cases, we recommend that people review their estate plan every three to five years or soon after significant life events.
Overlooking Beneficiary Designations
If you’ve named beneficiaries in assets such as life insurance policies, retirement accounts, and payable-on-death accounts, they will likely bypass your will and go to those you’ve named. That’s why it’s so important to update your beneficiary designations accordingly. Failing to do so could lead to unintended consequences, for instance, your ex-spouse receiving your 401(k).
Failing to Consider Tax Implications
Estate taxes play a pivotal role, even after your passing – they can significantly impact the value of your entire estate. Failing to plan for estate taxes, capital gains taxes, and income taxes on inherited assets can reduce the amount your beneficiaries receive. Working with a financial advisor or estate planning attorney is essential to understand the tax implications and explore strategies to minimize them, such as gifting during your lifetime or setting up trusts.
Choosing the Wrong Executor or Trustee
Choosing an executor in your estate plan is a crucial decision. This person should be someone you trust entirely and can count on to manage your estate, ensuring your wishes are fulfilled. Choosing someone untrustworthy, competent, and willing to take responsibility can lead to mismanagement and disputes. As you select, Fryer and Hansen recommend considering the person’s financial insight, integrity, and willingness to serve.
Failing to Communicate
One of the most important aspects of estate planning is prioritizing clear communication with your loved ones. If you choose to be secretive about your plans, you could create confusion and conflict among your beneficiaries. Communicate your wishes to your family members and loved ones to ensure they understand your intentions. While you don’t need to share all the details, providing an overview can help prevent misunderstandings and ensure a smoother administration of your estate.
Avoid these Mistakes with Our Estate Planning Lawyer McAllen
At Fryer and Hansen, we understand the estate planning process should be more clear-cut. When situations become confusing or your process becomes highly complex, know that you can always count on our estate planning lawyer McAllen. By working with our qualified team, you can ensure that your assets will be distributed according to your wishes and provide peace of mind for you and your loved ones. Contact Fryer and Hansen today to learn more about what we can do for you.