A huge portion of the real estate and wealth of this nation is owned by families living in the state of Texas. With proper planning, the older generation can keep the wealth here by passing it along to their surviving family members. If you’re looking to pass your wealth to the next generation, make sure to avoid some common estate planning mistakes that could cost your family.
Mistake No. 1: Failing to name beneficiaries
Bank accounts, investment accounts and other monetary assets all have beneficiary designations. When the original account holder dies, the account is then passed to the beneficiary immediately without the need for probate. The common estate planning mistake that people make is forgetting to add beneficiaries or update the beneficiaries on their accounts.
Mistake No. 2: Leaving the wrong type of assets
There are some assets that do not come with tax responsibilities and other assets that do. It’s important to know the difference if you want to make sure that an inheritance does not become a tax burden. For example, inherited IRAs and 401ks come with a tax responsibility if the beneficiary is not a surviving spouse.
Mistake No. 3: Not planning at all
The most common and worst estate planning mistake to make is not doing any planning at all. Although you may hear a lot of information about the best estate planning strategies, it’s important not to get overwhelmed by the information and end up doing nothing. Some planning is always better than no plan at all. When you’re ready to get serious about your estate plan, speaking to a lawyer can be a great first step.