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What is the biggest estate planning blunder?

All it takes to prevent an estate planning nightmare is preparation. Many, though, make the mistake of not diligently updating their estate plans, which can be quite costly. This is, perhaps, the biggest blunder people make in regards to estate planning (besides neglecting to do it all together, of course).

Whether it is forgetfulness or simple neglect, these mistakes can make it so one's wishes are not made known prior to any unfortunate occurrence, and they can also be harmful to the loved ones left behind. However, with guidance and an understanding of how to structure an estate plan, it is possible for Florida residents to prevent such mishaps. A well-constructed estate plan allows one to preserve assets and ensure that healthcare decisions are made in a way that is in line with their wishes.

Getting everything down on paper is just the first step in the estate planning process. Beyond that, beneficiaries need to be updated periodically to reflect one's current situation. There are many reasons why a Florida resident may need to update an estate plan, including a recent divorce or remarriage, the death of the primary beneficiary, the birth of a new child and many other changes in circumstance that render old designations outdated or obsolete.

Not only will updating beneficiaries spare loved ones a lot of pain, it can also help them to save on taxes if beneficiaries are named for an IRA. This makes it possible for heirs to postpone income taxes and prolong the period in which they are able to make withdrawals from the IRA. Plus, it shields loved ones from having to pay taxes on the money in one's retirement account.

Avoiding this and other blunders is possible with a clear long-term strategy and an understanding of how to best proceed in the estate planning process. Legal professionals are available to help guide Florida residents who are hoping to draft a solid estate plan and avoid mistakes that are common when individuals attempt DIY estate planning.

Source: Forbes, "The Big Estate-Planning Goof You May Be Making," Harper Willis, Dec. 16, 2013

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