The idea of creating an estate plan surfaces from time to time. But you hesitate. You occasionally have “paralysis analysis” because you do not know where to start and are unsure about what your estate plan should include.
But what ignites you are some of the basic foundations of estate planning. You get a chance to protect your estate and pass your assets on to heirs and beneficiaries. It is your move, but you want to make sure that you avoid making mistakes along the way.
Not informing your family
Here are some of the mistakes when it comes to estate planning:
- Not creating an estate plan: Having a plan — whether a will or trust – is critical. Without an estate plan, the state decides what will happen with your estate. You want in to be in control as to whom gets your assets. If the state inherits this responsibility, some of your assets may wind up in the hands of an estranged sibling or distant relative who you may not even know.
- Not telling your family of your plans: A secretive approach is not recommended. Your family does not want surprises. Meet with them, inform them of your intentions and what you hope your estate plan will accomplish.
- Not including advance directives: These may include a living will – a document that displays the medical treatments you would accept to save your life, and powers of attorney – financial and health care. For the latter, you name trusted people who will make financial and health decisions for you if you are unable to do so.
- Overlooking assets not subject to a will: Retirement accounts and life insurance policies are not subject to a will, so make sure to name beneficiaries for them.
- Neglecting your estate plan: Like your health, an estate plan needs regular attention. When matters in your life chance, you need to update your will or trust. Life changes may include change in marital status, birth of a child and moving to another state.
- Naming an unsuitable person as guardian of your children: You must consider the age, values and financial standing of anyone you consider as guardians for your minor children. Make sure to have a list of candidates and discuss the subject with each of them.
With the right approach, you can avoid any missteps when creating an estate plan. For starters, though, seek an experienced and empathetic legal ally.
Careful thought and thoroughness
You are on the right track when you decide to create an estate plan. Careful thought is necessary and so is thoroughness. That way, you will have a solid estate plan in place.