Creating an estate plan is one of the most important things you'll ever do, as this impacts you and your loved ones in a number of ways. Without an estate plan in place, there's no way of knowing exactly what will happen when you pass on.
Many people before you have made estate planning mistakes, but that doesn't mean you have to do the same. Knowledge of these mistakes can help you avoid trouble, and here are five of the most common:
- Not creating an estate plan: This one is obvious, but it's a mistake many people make. It doesn't matter if you're young and single or older with adult children, make sure you have an estate plan in place.
- Neglecting to make changes: Your life will change as you age, and so should your estate plan. Make changes as necessary, such as when you get married, have a child or come into more money.
- Forgetting to plan for a future disability: You need to have a plan in place in the event that you become incapacitated. For example, a power of attorney gives another person the ability to step in and make decisions on your behalf.
- Forgetting to name a guardian: It's hard to think about leaving your children behind, but this could happen. By naming a guardian, you know there will be someone to care for them should you pass on before they reach the age of 18.
- Choosing the wrong executor: When you pass on, your executor is in charge of handling your estate. This can mean many things, such as taking inventory of your assets, paying your debts and assisting with the probate process. You must choose an executor you can trust to carry out your final wishes.
When you avoid these estate planning mistakes you'll feel better about the plan you have in place and how it will protect your family in the future.
If you're concerned about the estate plan you've already created, review it in great detail with an eye toward making changes for the better. Furthermore, carry out a review every year in the future. This will ensure that you make any necessary changes at the appropriate time.
If you've yet to create an estate plan, it's time to review your situation and make key decisions that will give you and your loved ones peace of mind.