Almost 70% of Americans think estate planning is important, but only 26% actually have an estate plan, according to a 2024 PR Newswire survey. Estate planning is essential to ensure your assets are distributed according to your wishes and to provide peace of mind for your loved ones.
People often use the terms “succession” or “estate planning” to talk about the process of dividing a loved one’s property after they die. But there are mistakes that can cause problems, like arguments in the family, problems with the law, and probate issues.
So, can you do a succession without a lawyer? Although it is possible to complete a succession without an attorney, doing so is not advisable. Not working with an attorney can make the process much more difficult than it needs to be.
Let’s take a look at the things you need to avoid so that they might have a smooth transition when the time comes.
Failing to Create a Will
Many people don’t think they need to write a will because they know they can always put it off until another day. Some think they don’t have enough assets that warrant the creation of a will.
If you die without a will, your family may fight over your assets. You can make sure that your assets go to the people you want by writing a will. It also changes your legacy and how people will remember you.
This also applies to your business, which ensures that your company’s assets and operations are handled according to your wishes in the event of your death or incapacity. A business succession planning attorney is necessary for this. He or she can help ensure that a rightful person will inherit your business.
Failure to consider the business’s valuation could also result in unwarranted estate taxes or capital gains for the estate’s heirs. Never put off writing a will—do it today.
Neglecting to Update Beneficiary Designations
Although beneficiary designations may appear unchangeable, not updating them after events such as marriage, separation, or the birth of a child could lead to your assets being passed on to someone you did not intend to receive them.
A beneficiary designation naming an ex-wife on a life insurance policy would give her the payout instead of the new partner or kids. Be sure to routinely check and update your beneficiary designations so that your current wishes reflect the present-day reality.
Being proactive about assessing these designations can really eliminate some complicated problems and help provide for loved ones as desired.
Ignoring Tax Implications
Overlooking the tax consequences of an estate plan may inadvertently create a burden on the heirs’ finances.
Estate tax, inheritance tax, and capital gains tax can make a difference in the kind of legacy left. In the absence of proper planning, the beneficiaries may have to contend with a significant tax bill that will diminish the inheritance’s value.
Look into strategies such as lifetime gifts and trust formation to minimize tax exposure. Evaluating this field with a tax professional or estate planner can help you avoid the nasty nitty-gritty while ensuring the estate is designed to provide optimum benefits to one’s heirs.
Not Considering Healthcare Directives
Healthcare directives are integral to estate planning and should not be overlooked. These documents, such as living wills or healthcare proxies, lay out your medical preferences, as well as appoint someone to make decisions in your place if you are unable to communicate.
The estate planning process includes healthcare directives, which should never be forgotten. These documents, known as living wills or healthcare proxies, express your medical wishes while appointing someone to make decisions on your behalf should you be unable to communicate.
Without them, confusion and difficult choices might lay heavy on your loved ones and friends during a time of crisis. You might trust your family to know your wishes, but having an official directive removes the doubt.
Make it a point to converse about your wishes with your chosen advocate so that he understands your values. Do not wait for an opportune moment; an emergency can occur at any time.
Presenting your wishes through a directive fills a gap between your desires and peace of mind for your family.
Overlooking Digital Assets
Consider all possible aspects of digital assets, as these can be very valuable for someone to hold dear. Digital assets could include social media, online banking, cryptocurrency transactions, and photos.
If you forget about them, your family will have a hard time accessing these accounts or lose priceless memories with potentially huge financial implications.
You should start creating an inventory of your digital accounts together with their passwords. You can also consider using a password manager for their secure storage.
Choose someone trustworthy who will manage these digital assets in your absence. Provide detailed instructions in your estate planning documents.
