Estate Planning: 6 Factors You Can’t Afford To Ignore
Estate planning is critical to safeguarding and distributing your property to the rightful heirs.
Estate planning is critical to safeguarding and distributing your property to the rightful heirs.
Estate Planning Mistakes
An estate plan is crucial for senior citizens to prevent family conflicts over their assets after they pass away. Unfortunately, people often neglect estate planning despite its huge importance. This mindset could be due to their lack of knowledge about estate planning, or they find it futile because of the few insignificant assets they hold. But, regardless of their assets and circumstances, it is crucial to do estate planning.
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Here are some common mistakes to avoid when making an air-tight estate plan.
The language in the Will should be clear and easy to understand. The testator should list assets in his possession and their respective beneficiaries after he is gone. This step will ensure clarity about the testator’s intention regarding the distribution of his property among his loved ones. Additionally, they shouldn’t keep their estate plan a secret, which can breed suspicion, confusion and distrust among the family members. The person should appoint an executor and inform them about the plan, including the attorney’s name and where the Will is stored.
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Senior citizens should avoid gifting self-occupied houses or rent-bearing property to their children during their lifetime. Transferring property ahead of time can get them in trouble later because children or the legal heirs may refuse to care for them when they become older. Instead, they can do so via a Will.
Senior citizens shouldn’t neglect a nominee/nominees for their bank and other financial accounts. Failing to do so will create major trouble for the legal heirs in claiming the funds and assets, potentially delaying the process or creating legal complications. If minor children are involved, a guardian can be the caretaker of a property until they reach legal age. Additionally, the Will ensures your assets are passed down to the rightful heirs.
It is vital to regularly review your estate plan so you can update it based on evolving family situations, such as birth, death, marriage, etc., or a change in the citizenship status of family members. This step will ensure that every rightful heir is included.
One should choose a power of attorney (POA) for any property, bank, or tax-related transaction and pay for legal services, investments, etc. Any individual whom you can trust can be a POA to make important decisions on your behalf in situations like incapacitation.
A living Will can allow them to make medical decisions when they cannot communicate due to old age or illness. It should be an easy-to-understand document mentioning your treatment preferences, finances, etc. It will help the executor to make the right decisions on your behalf.
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Planning for inheritance is simple for married people. There is enough literature available to guide them on how to plan their inheritance. But the case is not so simple for single people.
In legal parlance, a custodian does not own the assets but keeps the assets in his or her custody till the heir mentioned in the will or the eligible legal heir is identified for owning the asset.
An executor plays a crucial role in a Will, so choose the person carefully to ensure fair execution of your wishes.
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