Don’t DIY: Unforeseen Estate Protection Pitfalls Could Deplete Your Valuable Assets
Estate protection focuses on defending assets from entanglements that can dilute them after you pass away. That includes everything from undue tax burdens to disagreements between beneficiaries.
The right estate planning strategy can save millions of dollars and significantly change the course of others’ lives. Still, many people insist on a “do-it-yourself” approach – and even the most clear-eyed, intelligent individual can overlook key issues.
The worst estate protection mistakes can truly undermine your life’s work.
Why DIY Doesn’t Work in Asset Protection
These days, more people are taking legal or financial matters into their own hands. They might wish to save money or simply feel they can represent their own interests best.
This perspective is understandable, but it can be foiled by the complexities of estate protection.
These three factors come back to frustrate even the best of intentions:
People are Unpredictable
You never know how others – friends, business partners, even family members – will react when assets are being allocated. Everyone goes into estate planning hoping for the best, but ensuring your desires are absolutely clear is what protects each stakeholder’s interests most fairly.
Assets (and Laws) Are Complex
Minor changes in tax laws could have a substantial impact on your assets. The differences are profound, potentially costing millions. To offset unexpected changes, it’s essential to ensure all major assets are accounted for within your plan.
An Outside Viewpoint Always Helps
Thinking about estate planning can be stressful for many reasons. When you are worried about your loved ones, you might miss important details. An experienced professional can help you act with compassion while still making sure all the fine details are accounted for.
Three Areas Where Doing it Yourself Falls Short
Through years of experience, our team has noticed areas where most clients are ill-prepared to navigate estate protection alone. Some of these include:
1. Overlooking the Power of Trusts
Trusts help ensure your assets endure even when they pass into other hands. While trusts are a very common way to protect inheritances for children and young adults, they can also be effective in helping adult children to manage unexpected large windfalls. Many kinds of trusts are available to defend and cultivate assets in different situations.
2. Failure to Avoid Probate
Probate is a long, expensive, and highly public process that applies to most assets passing to others through a will. Probate adds a lot of uncertainty and delay to estate settlement proceedings. In many cases, certain assets can be protected from probate proceedings. A pre-probate review can eliminate months of aggravation, particularly if you have assets in many states.
3. Using Only a Will
Writing a will is a true step in the right direction and one many people fail to undertake. Still, it is only one step of several. Your estate plan should also include other key documents such as a power of attorney and advance medical directive. Beneficiary designations for life insurance, annuities, and retirement accounts should be reviewed so you know they meet your needs.
For help navigating the challenges of estate protection, contact us today.