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5 tips to help you avoid estate planning chaos

On Behalf of | Nov 14, 2022 | Estate Planning

Perhaps you are about to schedule your first estate planning meeting with your attorney. Or perhaps you just realized you have not updated your documents in at least five years.

No matter your stage of preparation, here are five tips to help you avoid estate planning chaos.

1. Designate beneficiaries properly

The most common error people make in estate planning is not designating beneficiaries properly. When you set up your retirement plan or change investment companies, remember to name a beneficiary for the account. By doing so, the funds can go directly to the beneficiary after your death and will not have to pass through probate.

2. Fund a trust

If you decide to set up a trust, do not forget to fund it. Otherwise, assets that exist outside the trust may have to go through probate.

3. Minimize taxes for heirs

Any heir outside of your surviving spouse will be responsible for taxes owed on a retirement account such as a 401(k). However, you can convert your retirement account assets to a Roth IRA and help reduce the tax liability for your loved one. Your attorney can tell you more.

4. Plan for pet care

Your estate plan should include instructions for the care of your pet after you die. Set up a pet trust with money included specifically for that purpose. State who you wish to take custody of Fido or Fluffy when you are no longer here.

5. Choose how to allocate assets

Among the most important reasons to set up an estate plan is to ensure your assets will pass to those you designate. For example, although you intend most of your assets to go to your heirs, you may also want to provide certain funds to a school, a religious organization or a charity.


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