Many people have an estate plan but most plans have at least one of these common mistakes:
1. No plan, the wrong plan, or an outdated plan. Ninety percent of Americans have either no plan at all, the wrong plan, or an outdated plan. As your life changes, your plan may need to be altered to fit your new situation. Some plans, like revocable trusts, require maintenance.
2. No disability plan. A plan should deal with possible incapacity to protect privacy, personal choices, and save money in the future.
3. No "babysitters." Minor children need guardians; instructions should also be left to guide the guardians.
4. No inheritance protection. Some beneficiaries need protection from themselves or from those who would take advantage of them.
5. Improper estate tax planning. Old plans do not address changes in tax law and may make the estate plan more complicated than necessary.
6. Improper planning for life insurance. Make a mistake and you may owe the IRS half of your life insurance proceeds.
7. No probate avoidance planning for multi-state real estate. If real estate is owned in several states, probates may be required in each state. Avoiding the time and expense of multiple probates is the way to go.
8. No income or estate tax planning for retirement plans. More and more assets are held in retirement plans. Proper planning is a huge wealth development tool. Improper planning could force a majority of the retirement plan to be lost to income and estate taxes.
9. No business succession planning. Transferring a business from generation to generation is one of the hardest things to do; but, it can promote wealth, reduce taxes, and ease worries for everyone.