Estate planning is not always at the top of everyone’s list. Many of us put it off thinking that we have time to get around to planning only to forget to do so. In other cases, we plan for our estates but not in a manner which provides our estates and beneficiaries with the optimum advantages and protection. Whether it is a lack of planning or the wrong kind of preparation, there are certain estate planning mistakes which can be avoided. Here are a few common mistakes:
Not Having an Estate Plan
One mistake people commonly make is not having a will or trust in place. It may be that some people do not believe they have enough assets to warrant creating an estate plan. While others feel that they are too young to need one. However, most everyone regardless of their income level or age needs an estate plan in place. By not having a will you leave your estate to be divided according to Michigan law rather than your preferences. Further, taking the time to create a will or trust will afford you an opportunity to make thoughtful decisions about the future of your estate and to plan in the manner most favorable to you and your beneficiaries.
Not Planning to Minimize Taxes
Another common mistake is not planning for your estate in a manner which minimizes tax consequences. Leaving certain assets to beneficiaries may put them in a position of owning considerable estate taxes. When properly structured there are many options which will permit you to plan for your assets in a way which reduces the possibility of their being taxed.
Not Preparing for Long-Term Care
Not preparing for possible long-term care expenses can be a critical mistake in estate planning. It is surprising to some that Medicare will not cover long-term care such as extensive nursing home, hospice, or in-home care services. This leaves the individual who needs care in a position of either utilizing a previously acquired long-term care insurance policy or Medicaid. For either of these options to be effectively utilized, there must be adequate planning before the need for long-term care arises. Otherwise, a person may be left in the position of being in dire need of these medical services and not be in a position to pay for them.
Not Preparing for a Special Needs Dependent
Parents and loved ones of a child with special needs spend a great deal of time ensuring their needs are met. This may include making sure the child is qualified for governmental programs which will assist them throughout their adulthood. However, these programs are income-sensitive and often fail to cover all of the recipient’s expenses. With careful estate planning, the loved ones of these individuals can plan for their estates in a manner which ensures the individual is adequately funded without being disqualified from the programs that they depend upon.
Preparing your for your estate is one of the most important tasks you will complete. For that reason, it is important to prepare with the advice of an experienced and knowledgeable estate planning attorney who can help you avoid these and other common mistakes. Our office has the knowledge and experience you need to help you understand your choices and make informed decisions. Please contact us online or by phone if we may be of assistance.