Most Americans are making the number one estate planning mistake, with 67% of people not having an estate plan. However, this isn’t the only mistake you can make when preparing your estate plan. Avoiding mistakes is crucial for ensuring that your wishes get carried out the way you intend upon your passing.
Follow this guide and avoid committing these estate planning mistakes.
Taking a Passive Stance
All too often, people take a backseat role in planning their assets once they hire a professional. Even smart investors can take a step back and allow the professional to steer the estate planning vehicle. Do not sign your estate planning documents without understanding what they say and what is required of you.
You may need to take additional action once the documents are prepared and signed. If you don’t understand the plan, you won’t take the necessary steps, and your estate plan won’t be complete.
Doing It Yourself
You’ll find countless estate planning template forms online. However, these are generic forms and can easily lead you astray when creating your estate plan. Without professional guidance, you could use the wrong or outdated documents.
You could easily leave out important documents because you don’t know what you need. In addition, there could be terms in the documents you use that mean something different than what you think they mean. This can lead to your estate plan dictating something different than what you intend.
Avoid all of this by working with an attorney. Have a few consultations to find the best estate planner for your budget and needs. You can check out this practice to get started.
Not Doing Regular Updates
Estate planning documents are not done in a vacuum. What you decide and prepare today may not be the best plan for your situation in five, ten, or fifteen years. So if you set up your estate plan today, you need to revisit it every few years or when your situation changes.
When reviewing your estate plan, include any additions or changes that affect your asset and investment portfolios. This ensures you remove unnecessary designations and add any additional directives.
Not Naming Beneficiaries
You need to contact the financial institution directly for some of your assets. For example, retirement and insurance plans allow you to name a beneficiary. You need to do this with the providing institution with your chosen institution and not in your estate planning documents.
Avoid These Estate Planning Mistakes
Don’t be someone who doesn’t have an estate plan or makes any of these estate planning mistakes. You’ve worked hard for your assets and financial security, so make sure it’s handled the way you want after you pass. It isn’t enough to download a few generic templates and fill them out once.
Work with an experienced estate planning attorney to prepare your documents. Then revisit your plan every few years or when your circumstances change.
Check out our other financial planning articles for more helpful guidance on protecting your assets for the future.
