For some, estate planning can be a sensitive topic, and even one to avoid. After all, discussing such arrangements can make many Missouri residents uncomfortable, or unsure of where to turn for adequate advice. While it may be tempting to push estate planning to the wayside, establishing a plan early on can make the entire process a smoother one.
Some families have discovered the inconveniences of avoiding estate planning the hard way, as CNBC shares in an article on wills and estate plans. Many financial advisors have debunked the common misconception that estate planning is strictly for the wealthy, instead claiming most Americans could benefit from such arrangements. According to CNBC, more than half of all Americans die without a will — which is also the first and most basic step of estate planning. A lack of a will could make the financial process difficult for surviving family, including aspects involving living arrangements for minor children. In addition to a will, many Americans overlook the following:
- Individual retirement accounts
- Life insurance policies
- 401(k) plans
CNBC also stresses the importance of keeping these documents updated; as people go through different chapters of life, they may need to change their beneficiaries and other parts of an estate plan.
Think Advisor also spends time considering commonly overlooked steps in estate planning, first naming improper use of jointly-held property. Among the common problems associated with this part of estate planning are possible federal and state gift tax, ineffective provisions of a will and the potential for twice the amount of federal estate taxation. Another typical mistake in the process involves incorrect life insurance arrangements. According to Think Advisor, it is easy for the proceeds of life insurance to be payable at the wrong time or in an ineffective payment schedule. Creditors and state inheritance tax costs could be additional red flags of the process, should one choose to have life insurance paid to the insured’s estate.