Estate planning is crucial – it allows you to take care of your loved ones when you die and state your wishes should you become incapacitated. You should create a qualified estate plan for your wishes to be fulfilled. Some mistakes may limit the benefits your plan offers.
The following are four estate planning mistakes to avoid.
1. Not working with professionals
The documents and processes included in an estate plan require knowledge and experience. Thus, consider working with professionals, including a financial advisor, a tax professional and a lawyer, among others. They will help you create a binding plan that will protect your loved ones from disputes and liabilities and eliminate the chances of it being contested in the future.
2. Not having a criterion for distributing assets
A criterion for asset distribution is crucial in estate planning. This helps you understand who gets what. There is no formula to this, but it helps to have one so that your executor can make the right calls.
3. Forgetting about assets
During estate planning, you should list all your assets, including individual ones and those you share with other parties. Do not forget your digital assets. Then, hire a professional to value all of them.
Nonetheless, you don’t need to include all your assets, particularly those you don’t want to go to probate. The professionals you work with should help you identify these assets and determine the best way to pass them to beneficiaries.
4. Not updating the plan
Your estate plan should be updated when things change. For example, if an asset significantly increases or decreases in value or when you sell one. Other factors that call for an update are a marriage/divorce, the birth of a child/grandchild and a change in law, among others.
Estate planning is substantially beneficial when done right. It will help to get experienced legal guidance to avoid costly mistakes.