Every person has at least something of value – a home, a car, or monetary assets – which they would like to pass on to their loved ones after they pass away. Having an estate plan in place can help smooth the process of transferring the assets to the beneficiaries. Not only can it help you to make wise decisions as to how the assets should be transferred to the heirs, but it will also help in maximizing the actual value of the estate.
In order to ensure that your heirs receive maximum value from the estate, it is advisable to avoid these five common mistakes relating to estate planning.
Thinking that Estate Planning is Not Necessary
A lot of people have the wrong assumption that estate planning is not necessary, and that having a will is enough. The truth is estate planning will benefit your beneficiaries as your estate won’t have to go through the costly probate process upon your death.
Estate planning will help avoid the probate process for your assets. This will save time and costs of your heirs. Moreover, it can also ensure privacy of your wards as the probate process is very public that subjects an estate to public scrutiny.
Failing to Make Gifts under Estate Plan to Reduce Tax Burden
Failing to make gifts is a common estate planning mistake people make. Making gifts under estate plan can decrease the estate taxes. The Internal Revenue Code allows gifts up to $14,000 per year to be excluded from the estate tax. Gifts can be made to businesses, groups, or individuals are subject to estate tax savings of $28,000. This will result in maximizing the value of the estate for your heirs.
Not Updating the Estate Plan
A number of changes can take place within the family including divorces, death, and increase in assets. That’s why it is essential to regularly update your estate plan to ensure that your heirs receive full benefit from your assets after your death.
Not Transferring Life Insurance Policy
Most people don’t realize that proceeds of a life insurance policy are subject to a large estate tax when they die. As a result most of the proceeds will go in the accounts of IRS. That’s why it’s necessary to set up a life insurance trust so that your beneficiaries get the maximum benefit from your life insurance proceeds.
Not Getting Help of a Professional
Probably the most expensive mistake that you can make regarding estate planning is to not getting the help of a financial, tax, and legal professional, especially if you have a large number of assets. An experienced professional can help optimize the benefits of your estate for your heirs.
You can contact Law Office of John C. Grundy for legal advice and assistance relating to estate planning. Through the help of the professional attorney, you can craft required documents and achieve your estate planning goals. Call at (330) 637-9030 to get professional and specialized help relating to estate planning.