Estate planning is a serious matter that some people try to put off as long as they can. This can be a huge mistake because you never know when you will reach your final day. Taking the time to plan now can help you to feel more at ease, as well as helping your loved ones to feel less stressed.
When you are creating your estate plan, you need to make sure that you aren’t making mistakes that could be costly down the road. An estate plan that isn’t handled properly could be considered invalid. It might be challenged by someone when you pass away. This could lead to more expenses for your loved ones, as well as taking up their time. Here are some mistakes you should avoid:
Forgetting about your plan
Your estate plan will need to be updated periodically. It might be tempting to try to forget about it once it is made. You can’t do this. Instead, the plan should be checked at least once per year to verify that it is still reflective of your wishes. You should also review it when anything major changes in your life. This might include getting married or divorced, having a child or grandchild, losing a family member who was included in the estate plan or having a major financial change.
Not paying attention to the value
The value of your estate has a significant impact on how it is handled when you pass away. The inheritance tax will go into effect if there is an inheritance over a specific amount. The limit changes annually, so you need to make sure that you are considering this when you create the estate plan. There are legal ways to pay down your estate so that your heirs won’t have to worry about this. One option is to give gifts, which is possible up to a certain limit per person or entity each year.
Failing to plan for the future
Your future is an important part of your estate plan. The powers of attorney designations and medical directives lay out a plan for your final days. These aspects of the estate plan will only go into effect if you aren’t able to make decisions for yourself. The people you designate should be people who can follow your plans and stand up for you when you can’t do this for yourself. Making sure that you have these parts together can help to ensure that your wishes are complied with.