5 Common Estate Planning Mistakes
Establishing an estate plan offers many benefits. Not only can it help maximize the actual value of the estate you’ll pass on to your heirs and beneficiaries, but also give you the ability to make informed decisions concerning how your assets should be handled while you are still alive.
Following are common mistakes people make in Estate Planning:
- Believing that Estate Planning is a one-time event. Life brings with it an unending number of changes. Births, deaths, divorces, and new property acquisitions, changes in business structure, are all reasons to review and update your will. Therefore, to ensure the assets you leave behind are given to those you intend, you must review your collective estate plan regularly.
- Failing to plan for Tangible Personal Property. Tangible Personal Property includes jewelry, furniture, clothing, household furnishings, silverware, cars, boats, art work, and other physical possessions. These are typically the items that you want to bequeath to a specific person, and, also, are the specific items that your heirs hope to receive. Planning for disposition of your personal property is as easy as attaching a Personal Property Memorandum to your will. As long as the Memo is referred to is your will, you can keep a “running list” what can be altered or added to as the years go by.
- Not having a Trust. A trust can serve many purposes including protecting your privacy, ensuring you leave what you want, to whom you want, in the way you want. Additionally, a Trust can allow you “parent from the grave” by adding conditions that must be met in order for the beneficiary to receive disbursements.
- Failing to plan for disability. An unexpected or long term disability can often have great consequences on your personal and financial affairs. Decisions such as who will handle your finances, raise your children, or make healthcare decisions on your behalf are extremely important. Appointing a power of attorney and/or creating a living trust to work on your behalf in the event of a disability is crucial in planning for the future.
- Choosing the wrong person to handle your estate for you. Often people choose their spouse, oldest child, or oldest sibling to be with Personal Representative or Executor. This may not be the best-equipped person to be in charge of your estate. Choose your representative based on personality traits that line up with the job they need to execute.