Avoid These Costly Estate Planning Mistakes (Part 2)

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As we talked about last week here on the Veitengruber Law blog, there are quite a few common (and several less common) estate planning mistakes that can easily be avoided in order to minimize stress as well as time and money loss.

Today we’ll discuss several more gaffes that you would be wise to proactively thwart during the process of creating your will and other estate planning documents:

  • Mismanagement of life insurance – Oftentimes, life insurance benefits end up being paid to a beneficiary at a less than optimal time (i.e. the person isn’t emotionally ready to handle the money yet). This can lead to rapid-fire spending of money that was intended to support the beneficiary for years. Additionally, it’s important to ensure that you have enough life insurance, so that your loved ones will be sufficiently taken care of.
  • Failing to keep your will updated – A good rule of thumb is to review your estate plan after: the birth (or adoption) of a child, the death or divorce of anyone named in the will, a significant change in your income (or that of your beneficiary), and upon any significant changes in your overall health and well-being. Keep an eye out for any tax law changes that may affect your will, as well.
  • Grossly overestimating your liquidity – It takes a significant amount of money to settle an estate, so you’ll need to make sure you have enough cash available so that your executor will be able to pay all of the expenses, like: state death tax, federal estate tax, state and federal income tax, probate/administration fees, maturing debts, maintaining the welfare of family members, and transfer tax. Talk to your estate planning attorney about which of these costs will affect you.
  • Bequeathing assets directly instead of via trustTrusts ensure that your assets will be passed to your beneficiaries at appropriate times/intervals.
  • Leaving it all to one person (typically a spouse) – Oftentimes, the surviving spouse or beneficiary has never had to deal with a large sum of money before and simply isn’t equipped to handle it all.  Not to mention that leaving all of your assets to your spouse means you’ll miss out on skipping generations and helping your grandchildren out.
  • Disorganized (or lack of) records – The executor of your will is going to have plenty to deal with already; don’t make it worse by making your financial documents hard to locate. Simply keep all important documents that will be needed by your executor in a safe deposit box, and ask your NJ estate planning lawyer about death rules regarding said box.

As you can see, there are a veritable plethora of errors just waiting to be made during the estate planning process. We felt it was important to point quite a few of them out to you so that you can be aware of potential mistakes before you even get started. Consider printing this list, along with last week’s blog post, and bring them with you when you begin the planning process with your New Jersey estate planning attorney. If you’d like more information, or would like to set up a consultation today, call George Veitengruber, Esq. at (732) 695-3303. Check out our Facebook page, too, and get your consultation FREE of charge, just for “liking” us!

Photo credit: Images Money (flickr)

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2 Responses to Avoid These Costly Estate Planning Mistakes (Part 2)

  1. Pingback: Am I Legally Responsible for My Late Husband’s Debts? | Veitengruber Law

  2. Pingback: Can I Write My Own Will in New Jersey? | Veitengruber Law

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