Creating your estate plan can be a daunting task. There are many things to consider, and mistakes are easy.
Here are some of the most common mistakes to avoid when making your estate plan.
Five potential pitfalls
Creating an estate plan is an important task you should not take lightly. People make many errors when creating their plans, which can have serious consequences. Here are the five most common mistakes:
- Not having a will. A will is one of the most critical documents in your estate plan. It allows you to specify how you want to distribute your assets after death. Without a will, the state will determine how your assets will be divided, which may not be in accordance with your wishes.
- Failing to update your plan as your life circumstances change. You may need to revise your will if you get married, have children, or purchase a new home.
- Neglecting to name a guardian for minor children. If something were to happen to both parents, it’s essential to have someone in mind who would be willing and able to take care of the children.
- Not designating a Power of Attorney to make financial and legal decisions on your behalf if you cannot do so yourself.
- Setting up a trust but failing to fund it. A trust can be an excellent tool for avoiding probate and protecting your assets, but only if it is adequately funded.
Errors can be costly and stressful when creating an estate plan. A professional review of your documents can help avoid oversights and ensure that your loved ones are taken care of after you’re gone.