If you have a valuable legacy or have many assets, you probably already know how important it is to keep your financial plans up to date. However, being a high net worth individual does not guarantee immunity to commonwealth management mistakes. Because your portfolio is likely expansive and somewhat complexed, you may stand to lose a lot if you miss vital factors. Estate planning is the most common area that individuals make mistakes.
The primary objective of estate planning is to provide for your family after your death. However, your estate may be complicated, making it essential to clarify the fine details. Estate planning mistakes include:
Mistake 1: Not treating your estate as a whole
Considering your estate will be treated as a single entity, it is important to work alongside an only advisory team that can take care of each subset and the whole estate plan.
Mistake 2: Failing to name the best executor(s) or trustee(s)
Make time to discuss who would be best served as executor or trustee with your wealth advisor and your most trusted loved ones. The responsibilities of an executor or trustee are exceptionally complex, and those who you have chosen have a significant amount of responsibility. Keep in mind, you can name an attorney or another professional trustee rather than a loved one.
Mistake 3: Not fully planning asset distribution
You must consider the estate tax implications which could occur by transferring ownership, mainly if a family business is involved. It is essential to make sure that each asset is distributed in the best way to avoid unnecessary tax obligations to the beneficiaries. Make sure to draw up a detailed plan of the distribution of your assets.
Mistake 4: Not reviewing your estate plan
Estate plans must be discussed regularly, this is because tax codes can often change, and life events happen such as changes in finances, divorces, or marriages. This could make your whole plan outdated. Make sure to review your plan around every 3 years, or after a significant life event.
When you are ready to take the next step and find solutions to your estate planning needs, contact us at Global Investment Strategies at 520-360-8177.