We’re all going to die some day, so that’s why it’s important to live your life the way you want to, explore the world and accomplish goals. Among those goals should be creating an estate plan. With it, you have an opportunity to protect your estate and hand down your assets to beneficiaries.
Many decisions must be made. What will happen to the family heirlooms? Will you want some of your money to go to your favorite charity or even your church? The main thing, though, is to get started on making an estate plan. If you die without a will or trust, the state and courts will decide what happens with your assets.
Here are some estate planning mistakes you should avoid:
- Procrastination in not having a plan: Don’t procrastinate. If you don’t have children and your parents have died, the state may leave your assets to that pushy, obnoxious brother who tells those inappropriate jokes.
- Leaving your family in the dark about your estate plans: Don’t surprise them upon your death and the reading of your will. Inform them on your intentions and what you hope to accomplish.
- Neglecting to educate your heirs: This goes hand-in-hand with the previous point. If you’ve created a trust, you are essentially protecting your children, not punishing them. And sometimes that means protecting them from themselves through a spendthrift clause, a provision in a trust that protects a beneficiary’s inheritance from creditor claims.
- Not having the proper directives: What happens if you become mentally or physically incapacitated and you have no estate plan? You would need a health care power of attorney and a durable financial power of attorney who can make health care and financial decisions for you.
- Failing to update your estate plans: When your life changes, your estate plan should change, too. It’s important to update your will or trust when life events occur. This may include marriage, birth of a child, divorce, and gaining a large inheritance. Other changes you may consider are naming a new executor or guardians for your children.
- Selecting an inappropriate guardian for your children: What if they don’t have the financial stability to raise your children? And what if they are old? Naming your parents as a guardian may seem like the right thing to do, but do they have the stamina to raise a 15-year-old girl when they are in their 80s?
By being prepared, you will accomplish what you had set out to do, and in doing so, your beneficiaries may gain greater peace of mind.