If you have an estate plan in place, you're on the right track. However, this doesn't necessarily mean that you're protected. There are a number of issues that can actually make your estate plan less than effective. Make sure you know what these mistakes are so that you can avoid them.
Not Revisiting Your Will
A will is not meant to be an open and shut type of situation. If you made your will years ago and haven't revisited it, you're making a mistake. As life changes, so should a will. Take a single male who completes his will at age 30, for example. By the age of 50, his income has tremendously increased, he's married, owns property and has children. Should something happen, the will he created 20 years prior will likely not reflect his current desires, as it pertains to how he wants his estate disbursed. Any time you have a major life change, make sure you upgrade your will.
Transferring Property While Living
Don't transfer property while you're living. Transferring property while alive is considered a gift. Any gift with a value greater than $14,000 is taxable by the IRS. When you leave the property as part of an inheritance, it is only subject to an estate tax.
Provided the total value of your estate falls below the $5.45 million threshold, depending on what they plan to do with the property, they may not run into any tax implications. Since the value of any property you plan to pass down likely exceeds this $14,000 value mark, it would be a wiser decision to remain in the home as the owner.
Forgetting Healthcare Plans
Estate planning is not just about your financial concerns. It should also include your healthcare plans. Consider an individual involved in an accident that leaves them unable to make their own decisions, for instance. An estate plan with healthcare information included would ensure their family members knew exactly what their desires were concerning their medical treatment.
What type of procedures you do or do not authorize, whether you want to be cared for in a skilled facility or at home and whether or not you want to be resuscitated are just some of the factors to include as part of your healthcare component.
Creating an estate plan is one of the most important things you can do to protect your desires and your family, so make sure you are avoiding mistakes. An estate planning lawyer can help you.