While you may not want to make plans or discuss your death, estate planning allows you to protect both your assets and your loved ones. To ensure that the courts and your beneficiaries follow your wishes, avoid these common mistakes.
Failure to plan
Too many people postpone estate planning. You may not have advanced warning of an accident or illness, so you should update your estate plan at least every five years.
Some plans for your estate may cause resentment or confusion among your family members. Yet, having these discussions while you are still alive allows you to make your wishes known. It also reduces the chance of disputes and helps prevent your heirs from needing to spend thousands of dollars in court costs.
Specific people who should receive notifications about your estate plans include:
- Children and stepchildren
- Executors and trustees
- Any beneficiary
Choosing one beneficiary
Even if you want to leave all of your assets to one individual, naming only one beneficiary may cause problems. If that one beneficiary dies before the distribution of assets occurs, the court will decide who receives your assets. Instead, consider naming a contingent beneficiary who receives assets if your primary beneficiary dies.
Not naming power of attorneys
A power of attorney typically takes care of your financial decisions if you become incapacitated through an accident or illness. A healthcare power of attorney or healthcare proxy makes medical decisions. Discussing your wishes with both your power of attorney and your loved ones helps to reduce any disagreements that may occur.
Avoiding mistakes in estate planning allows your loved ones to spend as little time as possible in probate court. They can instead focus on the grief they feel from losing you and move on to healing.