No matter how diligent you are in your estate planning efforts, accidents can happen and mistakes can be made. Sometimes, even a seemingly trivial error could have serious consequences for your heirs, or for your estate plan in general. To ensure that your estate plan’s credibility is undiminished, it’s important to be aware of some of these common errors—and to know how to avoid them. Here are 10 errors particular to estate planning in California.
10 Common Estate Planning Errors
Whose Inheritance is it, Anyway?
A basic estate planning error is neglecting to list the proper beneficiaries. Simply put, you can’t leave your assets to anyone if you don’t name the recipient. Always double and triple check your estate planning documents to ensure that you’ve correctly identified the people to whom you want your assets transferred.
Another basic estate planning error is making a will and then forgetting about it. What you need to do is review it on an annual basis, and make any changes or revisions that are needed. As your family changes, you’ll want to make sure the proper beneficiaries are included.
New Law? What New Law?
Even after you create your will, new legislation can be introduced that changes the overall impact of your estate plan. Of course, you’re probably not reviewing new estate planning legislation on a regular basis, but that’s why you need to work with a California estate planning attorney, who can stay on top of these legislative changes on your behalf.
No Gifts in Sight
A slightly more advanced estate planning error is forgetting about gifts. People use gifting as a method to reduce estate taxes, by having some of those assets transferred to a beneficiary as a gift. Gifted assets receive little or no tax penalties, and count as such once they have been declared as gifts (even if they are still possessed by the original owner). Gifting strategies are important to any estate plan.
Most estate plans benefit from having a trust involved—and to have a trust, you need to appoint someone as a trustee. Use prudence in selecting a trustee. Specifically, seek someone you know to be responsible, and someone who you believe will look out for your family’s best interests.
Again, when you leave your estate plan untouched for long periods of time, it’s likely that it could lose some of its effectiveness. One particular thing to be aware of is any sudden disability; if you or a beneficiary is hit with a physical or mental infirmity, that could have implications for your estate plan.
Another advanced estate planning error is overlooking exemptions. Federal law provides exemptions for certain individuals when it comes to their assets, and it’s important that these exemptions be covered in your estate planning documents. Your California estate planning lawyer can clarify this for you, and help you identify the estate tax exemptions for this year.
Checking the Digital
Something else you’ll want to ensure is that your estate plan includes all your digital assets. That includes login information for all online bank accounts, as well as any social media profiles that you maintain. Don’t neglect to pass along this key information to your beneficiaries.
Estate planning should cover all possible contingencies—but there’s also something to be said for simplicity. You don’t need to set up a bunch of trusts when a single trust will do. Work with your attorney to ensure a smooth, uncluttered approach.
The DIY Tap
Finally, one of the most common estate planning errors of all is believing you can do it all alone. Estate planning is complicated, and it takes real diligence to get it right—which is why it’s highly recommended that you work with an estate planning lawyer. Avoid the negative aspects of DIY estate planning: Reach out to Singh Law Firm to learn more about our services in California estate planning.