Estate planning can help you secure your legacy and better ensure your loved ones are taken care of after you pass. While creating a plan is the responsible thing to do, there are some mistakes that you could make that may impact the plan you create.
Knowing what the most common mistakes are when it comes to American estate planning is the best way to avoid them.
Waiting to create a plan
Too many people are still waiting to create an estate plan. Whether it’s because they believe they have plenty of time or they simply find it uncomfortable to discuss, delaying estate planning can lead to unnecessary complications. Start the process early to provide peace of mind and allow for adjustments as your circumstances change.
Not having a will
A will is the foundation of your estate plan. Failing to create one can result in your assets being distributed according to state laws rather than your wishes. Take the time to draft a clear and comprehensive will, specifying how you want your assets distributed among your beneficiaries.
Ignoring beneficiary designations
You must update your beneficiary designations throughout your life. This must be done for your retirement accounts, life insurance policies and other financial assets. Failure to do this can result in unintended consequences. Ensure your beneficiaries are up-to-date and aligned with your current wishes to avoid disputes and potential legal battles.
Overlooking estate taxes
If you do not consider estate taxes, it may erode quite a bit of the value of your estate. Work with a financial advisor or estate planner to explore strategies that minimize tax liabilities, such as setting up trusts or gifting assets strategically.
Avoiding these common estate planning mistakes can help you protect your assets, minimize taxes and ensure your wishes are carried out smoothly. Take the time to plan carefully and seek professional assistance when needed to better ensure that your wishes are enforceable and respected.