If you are thinking about preparing your will, then congratulations, you are making a wise decision and taking care of your family and friends. However, a will is just one of many pieces of estate planning you should be considering.
The biggest mistake you can make with estate planning is not having any plan at all. Since you may be at least thinking about constructing your will, you need to make sure you do not procrastinate too long and end up not doing it at all. Here are other mistakes to avoid with your estate planning.
Not addressing healthcare
By creating a living will, you can provide explicit instructions on what kind of care you may or may not want if you are near death. If you prepare a durable power of attorney document, you can designate someone close to you with whom you trust to make decisions for you if you become incapacitated in some way. These issues can also be addressed with a living trust.
Not updating beneficiaries
A lot of events happen throughout life and they will most likely cause changes to your beneficiaries and how you want to address each one. Whether it be marriage, divorce, death, grandchildren or adoption, things can change or adjust quickly in life. It is also important to keep in mind that your retirement accounts and insurance policies will go to your beneficiaries, so making sure your wishes are up to date can be very important.
Wrong executor and trustee designations
It may be the most easy and logical choice to name a family member or close friend be the executor or trustee of your estate. While these choices are usually the best options, there are cases where an outside party may be more beneficial. This most common reason to hire a professional trustee is when there are family troubles or disagreements that may only be exasperated with a family member handling these duties.
Not working with a professional
While an estate plan may seem like a simple document to put together at first, you will quickly realize that having a professional providing expert and knowledgeable advice will be critical. For example, the intricacies when deciding between a will and revocable living trust is just one of the many items you will be happy to get advice on.
Not updating the documents
An estate plan is not something you only do one time and then forget about it. With changes to your family, financial situation and accumulation of property, you should think about revisiting your full plan and least once but maybe even twice a year.
Not leaving information and instructions
Leaving family and friends confused about how to access your critical information is not something they want to be worried about as they are mourning your death. It is smart to leave instructions about where documents are located, access to safety deposit boxes, online passwords and other documents. By providing this information in one place, you will be providing a great relief to your family.
An estate plan is done for the love of your family and to continue your legacy after you are gone. Taking great care of your estate plan is another way you are taking care of your family.