Estate planning is not a venture that is solely reserved for the very wealthy. Anyone who wants to protect and care for their loved ones can benefit from estate planning services. Estate planning ensures that the people who matter the most to you are protected well after you’re gone.
Poor estate planning can lead to many long-term problems, including delays, unnecessary taxes and fees, legal disputes, and financial hardship for your beneficiaries.
The best way to avoid these financial and emotional pitfalls is to speak with an estate planning expert like Saddock Advisory. Our team has the experience and skill to guide the way and provide peace of mind. In the meantime, however, it is helpful to understand the most common (and costly) estate planning mistakes.
Let’s dive in.
1. Create your Dream Team
Building the right team should be foremost on your estate planning checklist. To that end, a knowledgeable financial advisor, tax professional, and estate planning attorney can work together to create a plan tailored to your needs.
Each expert brings valuable insight, helping you navigate legal complexities, minimize tax burdens, and ensure your wishes are clearly outlined. With the right team by your side, you can feel confident that your assets will be distributed smoothly, according to your intention. Most importantly, the right team reduces unnecessary stress or confusion for your loved ones.
2. Keep Your Estate Plan Updated
An estate plan is not a stagnant, one-time venture. Major life events like marriage, divorce, births, deaths, and significant financial changes require estate plan updates. Be sure to revise your estate plan when any of these big changes occur. Regular reviews will help you keep your estate plan current and confirm that no adjustments are required due to external factors like market fluctuations.
3. Name the Right Beneficiaries and Executors
Regularly review the beneficiaries of your retirement accounts, life insurance policies, and bank accounts. It’s easy to overlook beneficiary updates, even as relationships and priorities change over time. Avoid naming minors as direct beneficiaries. Instead, establish a trust. It is a better avenue for protecting minors. Finally, verifying that your executor and trustee are trustworthy and can manage financial and legal responsibilities is paramount.
4. Plan for Incapacity, Not Just Death
Many individuals believe a well-prepared will can solidify their death bed wishes, but a will only takes effect after you pass away. This is why it’s essential to have provisions and instructions in case you are incapacitated, and are no longer able to make relevant decisions. Having a power of attorney, living will, or advance directive will cover all of your bases.
5. Minimize Taxes and Probate Costs
Without proper planning, your estate may be subject to high taxes and lengthy probate proceedings. These tax and legal burdens can be costly and time-consuming. To avoid these hurdles, use tools like trusts, gifting strategies, and charitable donations to reduce tax burdens. Additionally, always work with an established financial advisor like Saddock Advisory to create a tax-efficient estate plan.
6. Coordinate Estate Planning with Financial Planning
Estate planning and financial planning go hand in hand, for a wide range of reasons. Your estate’s value changes alongside the value of your investments and assets. Similarly, tax liabilities evolve and come into play with every new financial step or gain.
So, when reviewing your estate plan, make sure all of the details align with your investment strategy, retirement accounts, and long-term financial goals. A financial advisor who specializes in multiple strategies, and not just estate planning or investment planning, is the best resource to ensure these important aspects of financial management are seamlessly combined.
7. Avoid Costly Estate Planning Mistakes with Saddock Advisory
You may not need an actionable estate plan until many years or decades from now, but it is never too early to start strategizing and mapping out your estate plan to ensure your loved ones are protected.
One of the biggest pitfalls when it comes to estate planning is to wait or to go it alone, but Saddock Advisory can remediate all of these potential mistakes and more.
Reach out to our team of caring and client-focused financial experts today to start the conversation. With expert financial guidance and smart estate planning, we’ll help you build a secure and rewarding future.
