Estate planning isn't just for people with huge estates and millions of dollars in assets. It's something that every person, no matter how wealthy they are, should be thinking about. Planning for the eventual distribution of your assets after your death is probably not on your list of top ten things to do, that's understandable. However, you really need to do it, but you have to do it right. Here are three of the most common errors to avoid in estate planning.
Perhaps the biggest mistake that people make with their estate planning, is not doing it at all. It may be easy to procrastinate when you're young and fairly healthy. But, the truth is, you can't guarantee that you'll live another day, much less another two, three or four decades. If you die, or become disabled, before you have an estate plan in place, the state you live in will take over the distribution of your assets. The problem with that is, states usually work on intestacy laws, which generally divide estates into equal percentages that are distributed among family members. In other words, you won't have any say in who gets what, or how much they get, it will be out of your control
Setting It and Forgetting It
If there's one thing that you can count on, it's that things will change. That said, the people you designate as beneficiaries today for your life insurance policy, 401K and other assets, may not be the people you want to leave things to in five, ten or twenty years. Marriages end, new marriages begin, relationships change and people die, it's just the way life is. If you don't revise your will or trust to reflect those changes, you could inadvertently disinherit family members, or leave assets to someone you don't want to. That said, you should update your estate plan at least every couple of years, and more often if there are changes you wish to make.
Doing It Yourself
The internet is full of sites that allow people to create a myriad of legal documents, including wills and trusts. While they may promise to deliver the same protections as you would receive from an estate planning professional, be aware that this may not be the case. First of all, these types of estate planning web sites offer a variety of documents, none of which are specifically designed for you and your situation. What's more, you can't get good, sound advice from a web site. Sure, they may be inexpensive, especially when compared to a professional estate planner, but buyer beware. You will get what you pay for, so go for quality and choose an experienced lawyer or other estate planner. It will benefit you and your heirs.
If you have questions about the common mistakes people make in estate planning, or anything related, please contact us. We're experts in estate planning and we will be more than happy to answer your questions and assist you in any way that we can.