Regardless of your age and family structure, you work hard to build a future for you and your loved ones. Retirement/estate planning gives you the opportunity to control where and to whom your assets go even if you’re not physically there to make the decisions. Below are four major estate planning mistakes to be wary of making so your loved ones are taken care of after you pass.

Prevent Yourself From Making These 4 Estate Planning Mistakes

1. Lacking an Estate Plan or Will

Planning for life after you’re gone isn’t an enjoyable topic. As a result, you might procrastinate on retirement/estate planning. In reality, creating a will and making plans for your estate can give you and your family peace of mind knowing that everything will be financially cared for in your absence.

2. Forgetting to Routinely Update Your Will

The creation of a will and the naming of beneficiaries are important steps in estate planning. However, you must remember to update the will when a major life event occurs that affects your beneficiaries. These events might include a death, divorce, marriage, adoption, or birth. Other circumstances that warrant updates include if your children reach 18, if there’s an acquisition or selling of an asset, or if you’re close to becoming 70 and a half years old. Don’t forget to update beneficiaries on your retirement accounts and life insurance policies as well. It’s recommended to review your retirement/estate planning documents at least every three to five years.

3. Not Knowing How to Lower Your Estate Tax

Estate taxes are the amount you’ll pay on your assets before they’re transferred to your beneficiaries. To lower this amount, you can make annual gifts to your spouse of up to $14,000 without having to pay an estate tax. Both you and your beneficiaries will have more money if you take advantage of gifts. Meet with an accountant to learn other ways in which you can lower your estate tax.

4. Not Funding a Trust

A trust enables you to give assets to an individual while minimizing taxes. It’s important that if you create a plan for a trust, you should fund it. Otherwise, when you pass, there isn’t any money in the trust that can be legally given to the named individual. If this problem occurs, a lawyer will need to start a probate case to prove that the trustee, which is you, wanted this money given to the individual in their last will and testament.

Do you need help with your retirement/estate planning? Wilson, Rea, Beckel & Associates CPA’s LLC provide professional tax and accounting services in Pagosa Springs, CO. They understand that personal financial planning, such as estate and college planning, can be overwhelming, so they offer plans to meet your needs while building wealth and managing risk. In addition, they also provide a wide range of tax services, including tax preparation and audit representation. Give them a call at (970) 731-1040 or visit their website to learn more about why they’re the trusted financial services firm in the Pagosa Springs area.