Many people consider taking the DIY route with estate planning to save on legal fees or gain more control over the process. However, this approach often leads to mistakes that can cost you and your loved ones later. Let’s dive into the most common pitfalls in DIY estate planning and why working with a professional might be a better option.
Missing or improper will execution
One of the biggest mistakes in DIY estate planning is failing to properly execute a will. New York has specific legal requirements for how a will must be signed, witnessed, and notarized. Missing or mishandling any of these steps can invalidate the will, meaning your estate may not get distributed the way you intended. You must ensure you follow the correct process to avoid complications down the line.
Failing to update your plan
Life changes, and your estate plan should reflect that. Whether you get married, have children, or acquire new assets, failing to update your estate plan could lead to unintended consequences. For example, if you forget to remove your ex-spouse as a beneficiary or fail to include a new child, it could lead to unnecessary legal disputes and confusion over how you want to distribute your assets.
Overlooking tax implications
DIY estate planners often overlook the tax consequences of their decisions. For example, some strategies may lead to estate or gift taxes that you could have avoided with proper planning. If your estate exceeds certain thresholds, taxes could take a significant portion of your estate. Working with a tax professional or estate planner helps you minimize taxes and ensures you leave the most for your beneficiaries.
Underestimating complex assets
Estate planning isn’t just for simple cases, like passing on a home or bank accounts. If you own complex assets, such as business interests, multiple properties, or retirement accounts, your plan must address how these assets will be handled. DIY planners often don’t have the knowledge to manage these complexities, which can lead to issues later.
While DIY estate planning might seem cost-effective at first, it often results in mistakes that can be time-consuming and expensive to fix. Consulting with a professional ensures your estate plan is thorough, legally binding, and aligns with your wishes.
