Avoid These 7 Pitfalls of Estate Planning

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Getting your estate plan in order can be a complicated process, that’s why Gentreo is here to help. Gentreo simplifies the process and helps you create a comprehensive estate plan that you and your loved ones can depend on. Gentreo is with you every step of the way!

Here are some of the most damaging pitfalls, so you can be aware of them and avoid them as you create your estate plan…

Pitfall #1: Trying to do your estate planning on your own

One of the biggest mistakes you can make when approaching estate planning is trying to do it all by yourself. Creating your estate planning documents is a very important process and it needs to be done right. Gentreo walks you through the process and makes sure that all your documents are correct and legally-binding. A feature of Gentreo is that we offer free coaching to help you get started with your estate planning documents. Our coaches are there to make sure you understand the process and to help answer questions. If you have a complicated estate, Gentreo coaches will connect you with our marketplace of partner lawyers.

Pitfall #2: Not planning for contingencies

Nothing is ever certain, and a big issue that often arises with estate planning is the mess that results when someone doesn’t plan for contingencies. Gentreo’s program helps walk you through each step of estate planning and makes sure that all contingencies are taken into account. For example, with our proprietary estate planning surveys, you can add secondary and tertiary representatives such as trustees and personal representatives so that your plan prepares for all contingencies. 

Pitfall #3: Neglecting to keep your estate plan updated

Another mistake people often make is to forget to update their estate planning documents as life changes. While it can seem easy to create your documents and step away, it’s important to remember to update them now and again. Even looking back at your estate plan yearly can help to make sure everything is still correct. Take the time to update your contact information and to ensure beneficiaries are correct and their contact information is updated. Remember that your personal representative, also known as an executor, will need to track down your beneficiaries after you’re gone. Making the process and transition as easy as possible is as simple as checking back now and again and updating your plan as needed to make sure you and your loved ones are taken care of with your estate plan.

Pitfall #4: Having a one-and-done mindset about estate planning

Going into your estate plan with a one-and-done mindset could lead to all sorts of complications after you pass. As your life changes, so should your estate plan. Life changes, and you should update your estate plan to reflect changes such as the birth of a child or grandchild, a marriage or divorce that affects the ownership of your assets or adds/removes beneficiaries, or changes to your agents like your Health Care Proxy or Power of Attorney. Laws also change from time to time, and Gentreo notifies our users when changes in the law may impact their estate planning documents. So, staying on top of your estate plan is important. You want to make sure all that information is updated and correct in case something happens.

Pitfall #5: Naming a minor as a beneficiary or co-owner

Something else to avoid is naming a minor as the Beneficiary or Co-Owner. Minors cannot inherit or own property until they are of age (18), so it’s better to set up a trust if you have minor beneficiaries. Leaving a minor as a beneficiary often means that until they are of age, the court will appoint someone else to look after the funds. Always consider how the age and maturity of your beneficiary could affect what is being left to them. Inheriting everything at 18 could lead to more risky short-term purchases rather than if a trust is set up for a minor so they would not inherit until they reach the age of 25. 

There are similar issues with naming a minor as a co-owner. While it is legal for a minor to own property, until they are of age that property will be managed by their legal personal representative. With a trust, you still maintain a level of control over the property and can safeguard against any risky spending or bad decisions a child may make at 18.

Pitfall #6: Giving an inheritance or gift twice

Sometimes people forget what they’ve left gifts to others in their Will, and they end up giving that gift before they pass away. For example, say you plan to leave $5,000 to your niece and you list that gift in your Will. If you were to give it to her before passing without updating your Will to remove the gift, she would inherit that money again upon your passing. It’s important to make sure that all your documents are updated and that they reflect your wishes. Simple mistakes like these are easily avoidable as long as you continue to review your estate plan documents and make sure they accurately match your intentions after you pass.

Pitfall #7: Not funding the Trust or insufficient trust funds

A crucial step of having a Trust in place is funding it. The Trust needs to have enough funds to cover the costs of the assets it ‘owns’, such as your mortgage and property tax – if you transferred a home to the Trust. If you pass without fully funding the Trust, you may be nullifying its benefits. Take the time to make sure assets are owned the right way and fund your Trust so that it actually works for the ones who need it the most.

Gentreo can help you avoid these and other estate planning pitfalls

Like these seven, there are many pitfalls throughout the estate planning process. Although it can be easy to make mistakes that counteract your estate plan, Gentreo helps you avoid these pitfalls and create a comprehensive, legally-binding plan. With Gentreo there’s complete transparency every step of the way. We help you create your plan the right way so that it works in the way you intended. Use Gentreo to plan, prepare, and protect what matters most. 

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