Estate planning is an important process, not only because of what it protects but because of the possible mistakes that can be made. Anyone who is new to estate planning would be prone to making a mistake here and there, and those mistakes can be major factors in the way your estate is handled.
So what are some common estate planning mistakes and how can you avoid such pitfalls? Let’s take a look at a few of them:
- Not having an estate plan or not updating it. These are two common mistakes. People either procrastinate on actually creating an estate plan, or they ignore the estate plan they already have. In either case, there can be consequences. If you die without a will, your estate may not be handled the way you intended. And if you don’t update your estate plan over the years (to incorporate major life events such as marriage or divorce), then your assets may be passed on to people you didn’t intend to receive such benefits.
- Failing to protect yourself from taxes. Use all of the tools in the estate planning arsenal to limit your tax liabilities when your estate plan is executed. Trusts are a big part of this.
- Forgetting about late-life conditions and disabilities. You should plan for disabilities or conditions that could incapacitate you later in life. If you include this in your estate plan, not only will it help you to be cared for if such situations arise, but it can also protect your estate from nefarious meddling but other parties who may try to take advantage of your incapacitation.
Source: FindLaw, “Ten Common Estate Planning Mistakes to Avoid,” Accessed May 9, 2016