It is best to begin estate planning as soon as possible since it will make the process easier and more efficient in the long run. Once a person has a plan created to implement the estate administration process he or she will simply have to update the plan periodically in order to ensure assets are distributed as intended. However, there are various common mistakes which people in Maryland and other states should be careful not to make.
One of the most common mistakes people make is assuming that they are too young to start their estate plan. However, even though one may be relatively healthy without many assets, this is still no reason to ignore estate planning needs. Planning an estate not only involves how to distribute assets, but it also includes deciding who will be able to make decisions for in the case that one is incapacitated in some way. This is accomplished through a power-of-attorney document.
Another common error that people make when planning their estate is forgetting to take tax liabilities into consideration when making decisions regarding one’s estate plan. It is important to keep up-to-date on the latest changes to estate tax laws in order to make the most tax efficient decisions. Some people are successful in saving their heirs from dealing with estate taxation by gifting assets while they are still alive.
Lastly, people commonly make the mistake of not updating their plans for estate administration in Maryland and elsewhere. It is important to make the necessary alterations to reflect significant life changes, such as the birth of a new child or a divorce. Some of these life changes may require one to update his or her estate plan. These changes may even be the catalyst which prompts a person to begin thinking about estate planning in the first place.
Source: Business Insider, 5 Common Estate Planning Mistakes To Avoid, Mandi Woodruff, Oct. 21, 2013
