Regardless of wealth, everyone should have an estate plan. Sure, a lot of the focus when it comes to estate planning is on the distribution of assets, but there’s so much more that goes into the process. For example, your estate plan can specify who will make important healthcare and financial decisions for you in the event that you become incapacitated. You can even have your estate plan to specify who will care for your children in the event that you and your children’s other parent pass away.
If you appropriately address all aspects of the estate planning process, then you can find your mind put at ease knowing that you’ve taken care of yourself, your assets, and your loved ones. But all too often people make mistakes when navigating this process, which can put the entire plan and your estate in jeopardy. Therefore, as you move forward with this process, you’ll want to make sure that you avoid some of the most common estate planning mistakes.
Avoid these common estate planning pitfalls
There are a lot of missteps that can be made during the estate planning process. Here are some of the most common:
- Procrastination: A lot of people think that they can put off estate planning until later in life. However, putting off the process could result in a situation where you pass away without an estate plan, meaning that your assets will then be distributed in accordance with state law. This can run counter to your intentions, and it can lead to extensive costs to your estate. It may even result in your loved ones fighting over certain portions of your estate.
- Failing to update estate planning documents: Even though it may feel like a big accomplishment to create an initial estate plan, and it is a big milestone to achieve, you need to make sure that you regularly revisit your estate plan to modify it as needed. Changed relationships, births, deaths, marriages, divorces, and the acquisition of new assets may change how you want your estate to be distributed when you’re gone. But your plan will only reflect your current wishes if you regularly visit it to change it as needed.
- Forgetting about long-term care: Statistics are clear that there’s a significant possibility that you’ll need some sort of long-term care in the future. This care can be expensive, quickly eroding the wealth that you’ve worked hard to accumulate with the intent of leaving to your loved ones. Fortunately, there are estate planning techniques that you can use to preserve your wealth while still preparing for the potential costs of long-term care.
- Choosing bad executors or trustees: When you create your estate plan, you can specify who you want to manage your estate or any trusts that you’ve created. This is an important decision, as you’ll want to choose someone you can trust to put the interests of your estate and your named beneficiaries first. If you choose the wrong person, then your estate’s wealth could be mismanaged to the detriment of your loved ones.
There are a lot of other mistakes that can be made when navigating the estate planning process. That’s why you need to be aware of them and how to avoid them.
Do you need additional information and guidance?
We know that the estate planning process can feel daunting. But you shouldn’t let that paralyze you into inaction. On the contrary, you should use that as a motivating factor to seek out the help that you need to build a strong estate plan that protects your vision of the future. Hopefully then you can rest easy knowing that you’ve done everything you can to protect your wealth and your loved ones.