Do you cringe at the thought of creating an estate plan? Do you worry that your current estate plan is missing something important?
It's never easy to contemplate your own mortality and complete your estate planning, but if you do, you can feel peace of mind about your decisions.
Here are seven estate planning mistakes that many people make. Having knowledge of these will help you avoid going down the same unfortunate path:
- Forgetting to create an estate plan. It doesn't matter why you put this off; not having a plan in place is a mistake that can be quite costly to you and your family.
- Neglecting to review your estate plan, as necessary. Some people think that simply creating an estate plan is sufficient. While a basic plan is a great start, it's important to review it every so often, especially if you or your family have experienced major life changes. Estate planning professionals recommend an annual review at the very least.
- Neglecting to update your estate plan after major life events. There are times when you need to update your estate plan; for example, after a divorce or marriage, the start or end of a business, or the birth or death of a potential beneficiary.
- Not planning for a potential disability. There is more to your estate plan than thinking about what will happen to your assets upon your death. You also need to plan for a potential disability or incapacity. This can be addressed by drafting powers of attorney.
- Not considering estate taxes. Did you know there are steps you can take now to help your loved ones save on estate taxes in the future?
- Choosing the wrong executor. You need to think long and hard about who will administer your estate upon your death. This person has a big responsibility, so it's important to make the right decision.
- Forgetting to name a guardian for minor children. If you have any children under the age of 18, it's important to name a guardian, as this person can care for the child in the event that you and your spouse pass on. You may also want to name a separate fiduciary guardian to manage their financial affairs as well.
Now that you're familiar with some of the most common estate planning mistakes, you can implement strategies for avoiding them. It's best, though, to have the help of an estate planning attorney when drafting important estate documents.