Estate planning is essential in preparing for the future. It helps ensure that your loved ones are cared for, and your final wishes are implemented. However, without the proper knowledge, you may find yourself making mistakes that can have significant consequences.
Here are some common estate planning mistakes and how to avoid them.
1. Not having an estate plan
The biggest mistake people make is not having an estate plan at all. Many people believe the myth that estate planning is only for the wealthy or elderly. In actuality, creating an estate plan ensures your assets are distributed according to your wishes after your death.
2. Failing to update your estate plan
Your life will go through stages; your estate plan should reflect that. Some people create an estate plan and then forget about it, which can lead to problems if circumstances change significantly.
You can avoid this by regularly reviewing your estate plan, especially after life events such as marriage, divorce, the addition of a child or major changes in your financial status.
3. Failing to consider incapacity
Estate plans are about more than what will happen to your assets after death. It should also include documentation on how you want your legal and healthcare matters handled if you become incapacitated and are unable to make decisions for yourself.
Including a power(s) of attorney and health care direction in your estate plan appoints someone you trust to make decisions on your behalf if you cannot do so.
Creating an estate plan may seem overwhelming, but it doesn’t need to be. Working with someone to guide you through the process can help you create an estate plan that accurately reflects your wishes.