Proper estate planning can protect your assets and make things easier for your loved ones. There are several vital elements of estate planning that can accomplish these goals, but all too often people avoid planning until it’s too late. An estate planning lawyer can help you avoid these mistakes so your legacy is preserved according to your wishes.
Failing to Create a Will
Believe it or not, more than half of American adults do not have a will or estate plan. This may be changing due to the coronavirus pandemic, as people are realizing that it is more important than ever to create or update your will and other estate planning documents. Dying without a will means that your entire estate will have to go through probate, which can be a lengthy, costly process. Typically, a will must be executed in the probate court, but having everything laid out makes the process much more straightforward. If there is no will, the court will appoint a personal representative to oversee the distribution of your estate, payment of debts, the filing of inheritance tax returns, and other responsibilities. Without a will, the property will be distributed according to Pennsylvania intestate succession laws.
The court may even have to name a guardian for minor children, which can have a serious emotional impact on them at an already difficult time. Having a wills and trusts lawyer help you create a valid will helps cut down on family conflict and ensures your assets are distributed as specified. If you’re concerned about the cost of hiring an attorney to help you with your estate plan, keep in mind that the price your family may pay after you are gone could be much higher.
Forgetting to Update Beneficiaries
Updating beneficiaries on your life insurance policies, bank accounts, investment accounts, and retirement accounts such as IRAs and 401(k)s can also save your family time and headaches. These items typically do not have to pass through probate, but if a beneficiary has passed away or you failed to name one, things can get messy. For bank and brokerage accounts you can sign Paid on Death (POD) forms and Transfer on Death (TOD) forms, which allows them to avoid probate and be automatically transferred to the person, trust, or charity you specify on the form.
Not Protecting Assets with a Living Trust
Also known as a revocable trust, a living trust is usually exempt from probate. A revocable trust is created while you are still alive, and you can change or cancel the provisions at any time. Most assets can be put in a revocable trust, including valuable possessions, real estate, bank accounts, and investments. Upon your death, assets in a revocable trust are transferred to your designated beneficiaries. Having a qualified estate planning attorney help you create a revocable trust is essential to ensure it is done properly.
Whether you need to update or create an estate plan, our team at Carosella & Associates can help you find creative solutions to ensure your assets are preserved, your family’s interests are protected and your legacy lives on. Learn more about our estate planning services here.