At first glance, estate planning may seem pretty simple. You simply draft up a document that specifies how you want your assets to be distributed, right? That’s true to a certain extent, but the process is much more nuanced than that, especially if you want your estate to be handled in line with your vision of the future.
To ensure that your assets are utilized in accordance with your wishes, then you need to make sure that you have a comprehensive estate plan that suits your needs as well as the needs of your loved ones. This means avoiding some of the most common estate planning mistakes, which include the following:
- Failing to plan: A lot of people simply put off estate planning until it’s too late. Don’t let that happen to you. If you do, then your assets may fall into the hands of those you don’t trust given that state law will dictate how your assets will be distributed.
- Failing to modify a plan: Estate plans have to be revisited A death, marriage, birth, changed relationship, or the acquisition of a new asset may all warrant an estate plan modification. So, be sure to revisit your plan frequently to ensure that it’s still meeting your needs.
- Naming only one beneficiary: It might seem like common sense to leave assets to one individual, but what happens if that individual passes away before you do or shortly after inheriting? By naming a second beneficiary or using a remainder trust, you can ensure that your assets remain protected and with those who you want to support.
- Forgetting non-financial estate planning tools: Although much of estate planning is focused on the distribution of your assets, there’s more to it than that. For example, you should make sure that you’re not neglecting powers of attorney and healthcare directives so that important financial and healthcare decisions will still be made in your best interests in the event that you become incapacitated.
- Neglecting to address digital assets: With our lives becoming more digitalized, you must address these digital assets in your estate plan. But far too often people forget to do so, which puts them at risk of having these assets fall into the wrong hands or spur familial infighting. These assets can include your social media accounts, online bank accounts, cryptocurrency, and digital photo collections.
- Overlooking charitable endeavors that are important to you: There are probably causes that are important to you. You can help further those causes through estate planning. But you have to be intentional about doing so, which means that you need to take a comprehensive approach to your case to figure out what strategies you need to utilize to suit your needs and wishes.
- Fully considering your children’s futures: While a lot of people think that leaving all of their assets to their children is the best course of action, this may not be the case. For example, leaving a home to a child may do nothing more than entangle them in unwanted financial obligations. So, think about discussing your children’s future with them so that you can create the plan that you think is best for them.
Are you ready to create the estate plan that’s right for you?
There’s a lot that goes into a proper estate plan. That’s why you need to know your options and how to avoid some of the most common estate planning pitfalls. If you’d like some assistance in navigating the creation of your plan, then now is the time to discuss your circumstances with an experienced estate planning attorney.