Mistakes to avoid in estate planning

On Behalf of | Mar 22, 2018 | Estate Planning

Nevada residents should be aware of a few common mistakes in estate planning. One of those errors is not having the minimum components of a plan. For example, many advisers recommend having at least a will and powers of attorney that appoints someone to handle financial and medical affairs if the principal becomes incapacitated. Another error is failing to plan for the distribution of personal effects. Sentimental items may have the potential to cause more conflict if the estate plan is not clear about who gets what.

A person who uses a trust should reconsider naming a friend or family member as trustee. This can be a big responsibility, and a professional might be a better choice. It may be best to use beneficiary designations to pass on assets such as IRAs since they will not have to go through probate and can be placed in a tax-advantaged account.

Older estate plans should be reviewed to ensure that the testatorwants to keep the same executor and beneficiaries. If the testator has moved to a new state, it may need updating according to state law while wealthy people might need to update according to higher estate tax exemptions. Any life insurance policies should also be reviewed.

There are other aspects of estate planning that an attorney might also be able to assist with. For example, a person might wonder whether a trust is the right choice for a particular situation or might not even be aware of the versatility and usefulness of these types of documents. A trust could be used to protect assets from spendthrift beneficiaries or simply for reasons of privacy. A special needs trust can help support a loved one who receives government assistance without affecting those benefits.