Creating an estate plan requires decisions about the future that will become legally binding. A mistake can leave your family without the guidance they need to follow your wishes.
Today, we address some of the most common mistakes someone can make when it comes to estate planning:
1. Not creating a plan at all
This might seem like an obvious one, but many people seem to think estate planning is only for the super wealthy. The truth is everyone, especially those who own a business or professional practice, should have an estate plan. A will acts as a good start, but in most cases, you’ll want a more robust plan.
2. Forgetting to make updates
A successful estate plan grows and changes as your life does. Make sure your plan includes updated beneficiary designations, to ensure it matches your current wishes. Otherwise, someone may find themselves left out – or someone who is no longer a part of your life may inherit more than they should.
It is also essential to update ownership details for important assets.
3. Leaving out disability and long-term medical care plans
Too often, people forget that if they become incapacitated, someone else will need to make medical care decisions for them. Ensure you get the care you want by creating a living will, durable power of attorney, a living trust, or a combination of these.
4. Putting your child’s name on a deed
It may seem like a nice gift to put your child’s name on the deed to your house. But, doing so leaves them with a significant tax burden. Instead, address passing on property in your will or estate plan.
5. Ignoring family dynamics
When you are choosing executors for your estate, keep family dynamics in mind. If two of your children already have a strained relationship, putting them in charge of distributing your assets during a time of grief might make things worse. It also pays to consider family relationships when you are deciding how to allocate your assets.
Keep your wishes at the forefront
Estate planning is a personal process, with many vital components. Avoid these mistakes by working with a skilled estate planning professional.