On its face, estate planning seems simple. You put together some documents that specify how you want your assets distributed once you pass away, right? True, but if you want to get the most out of the estate planning process, you should know how to utilize your options to your advantage.
You should also be aware of some of the common mistakes that are made during estate planning, as many of them can threaten the legal validity of your plan and the disposition that you seek.
Avoid these common mistakes when creating your estate plan
Many missteps can be made along the way when you’re creating an estate plan. Let’s take a quick look at some of the most commonly made estate planning mistakes:
- Putting off estate planning: By procrastinating, you risk something happening before you’re prepared for it. As a result, you might have people you don’t know, or don’t trust, making important healthcare and financial decisions for you, and your assets could end up in the hands of those you never intended to inherit. That’s why the sooner you can start planning, the better.
- Not discussing your estate plan with your family: Talking to your family about your estate plan can set expectations and reduce the risk of familial infighting once you pass away. The latter often occurs when there’s disagreement over your intent, but you can avoid this issue by making your wishes known in advance.
- Forgetting about contingent beneficiaries: Your bank accounts or life insurance policy may name a primary beneficiary, but they should also have a contingent beneficiary. If you don’t name a contingency beneficiary, and if the primary beneficiary passes away prematurely, those funds are then directed to your estate, and may require probate. So, it’s always a good idea to have a contingent beneficiary named.
- Overlooking final arrangements: While much of your estate plan is going to focus on asset distribution, you can also use this process to specify how you want your hospice, funeral, and burial arrangements to look. This can lift a burden off your family’s shoulders.
- Forgetting to include digital assets:In today’s world, you probably have more digital assets than you realize. These can include social media accounts, cryptocurrency, and online photo banks. By including these in your estate plan, you ensure that they won’t be forgotten or lost.
- Failing to plan for disability and long-term care:You might be healthy now, but you may end up disabled or in need of long-term care at some point in your life. When that happens, you want to have a plan for covering your expenses. If you don’t, these costs can quickly diminish your estate, leaving your loved ones with little to inherit.
Now is the time to put together the thorough estate plan that’s right for you
It can be hard to kickstart the estate planning process. It’s difficult to think about your own mortality, and untangling the intricacies of the process can be confusing. But, with appropriate guidance, most people who plan their estates are relieved to know that they have the protection in place.