Avoid These Estate Planning Errors
Jan. 4, 2021
Estate planning mistakes in South Carolina can be costly, causing both financial and emotional turmoil for heirs. Unfortunately, these errors are also not uncommon, but being aware of some of the most frequent ones can help you avoid them.
The Dangers of Doing It Yourself
While a do-it-yourself will might seem like an easy solution, this type tends to cover only the simplest of circumstances, and even then, using them can backfire. Furthermore, many people do not realize that their own estates are not as straightforward as they think it is. They might not understand the tax implications of certain estate planning decisions, or they may not be aware of fairly straightforward solutions to common problems. For example, leaving assets in a last will and testament to a relative with special needs who receives government assistance could jeopardize that person’s assistance, but creating a trust could solve this problem.
Incomplete or Out-Of-Date Documents
Drawing up a trust document is only part of the process of creating an effective trust. The created trust must then be funded. This can be done by retitling assets in the name of the trust. People frequently fail to fund their trusts, or they forget to review the planning documents regularly to ensure that they remain up to date. Changes in the law, in the family, or in a person’s assets can make it necessary to change the official estate planning documents as well. People should also make sure their wills and any trusts remain consistent with beneficiary designations.
Lack of Communication
Family dynamics dictate to some extent how open individuals are able to be with their heirs about their estate plans, but clear communication decreases the likelihood that the plans will be misunderstood or challenged. Talking to family about an estate plan ahead of time can prepare members for its contents.
Working with a professional on an estate plan may help prevent these errors. An attorney may be able to anticipate potential issues with certain approaches to estate planning based on a person’s individual situation and suggest alternative solutions.