Common mistakes when estate planning

Date: Jun 04, 2014

Estate planning can be tricky business. The issues that can arise from simple errors can cost dearly after your death and can add significant stress to your family at this tough time.

This is why we have complied a comprehensive list of common mistakes that can occur during estate planning. These can also be avoided by working with an estate lawyer who can make sure all the details are correct.

Deciding worth based on price

This is a mistake that is very easy to make. When you purchase an item such as a vehicle, a piece of jewellery or clothing, the value is immediately lowered or increased based on what you do with it.

When it comes to planning the value of these types of items, it is vital to look at the value in the present and future tense. An item with significant sentimental value after being in the family for over 50 years, for example, will be worth much more than when it was purchased.

The same principle applies to the value of your house. With house prices across Australia spiking in recent years, it is unlikely that your house bought in 1980 for $100,000 is still worth the same amount. Suburb prices will have gone up and this should increase your estate value even further.

The total estate value could seem like a massive amount, but working out individual estimates for all your assets is vital to ensuring the amount is as close to correct as possible.

Joint property title with children

Having the title of your property jointly held with your children may seem like a logical transition, but can cause problems down the line. If your transfer the title to someone else, there is no way to retrieve that asset or pass it on after your death.

That person then has the power to on-sell even before you die. It is much better to discuss your options with an estate lawyer that can set aside provisions for assets to family members in your will.

Failing to update your estate plan

When life changes, you need to change your estate plans. Whether this is a new child to the family or a divorce, your estate needs to accurately reflect the stage of your life.

Unfortunately, there are countless examples of wills and estates being challenged because you didn't omit your ex-spouse or you forget to include your third child. The only way to make sure every circumstance is included is by having your estate managed by a lawyer who can ensure a smooth transition for your assets.