Crafting an estate plan is a crucial step to guarantee that your legacy, including all of your assets, are distributed in the manner you desire after you pass away. Unfortunately, many people make fundamental errors that can diminish their estate plans’ effectiveness. To help guard against this potential issue and ensure peace of mind for yourself and those close to you here are three frequent blunders made when creating an estate plan.
Not Updating Beneficiaries
Creating an estate plan is a crucial process, yet many overlook the importance of updating beneficiaries when their plans are put into place. Many mistakenly assume that designating beneficiaries will be taken care of within their last will and testament; however, this isn’t necessarily true. It’s essential to regularly update your beneficiary list if you have life insurance policies, retirement accounts or other financial assets for which you’re leaving behind designated beneficiaries. Neglecting to do so can lead to unintended consequences such as leaving money and property to former spouses or estranged family members – something no one wants!
Thinking Trusts Are for the Rich
A common misconception about estate planning is that trusts are only for wealthy individuals or those with multiple assets. On the contrary, anyone looking to distribute their assets according to their wishes can benefit from a trust. Not only do they help reduce taxes and simplify probate proceedings, but also provide support for minor children or special-needs beneficiaries. Probate can be a long and expensive process, so you want to avoid it if possible. For those seeking an effective way to protect their wealth in the long run, a trust may be just what you need! Additionally, trusts can help protect assets from creditors or legal claims. It’s essential to consult with an experienced estate planning attorney to determine whether a trust is right for your situation.
Forgetting the Power of Attorney
Lastly, don’t make the all-too-common blunder of overlooking a power of attorney in your estate plan! This legal document grants another individual authority to manage matters on your behalf should you become incapable or unable to do so. If you omit this step from your planning, there is potential for someone appointed by the court not aligned with what you desire which could cause costly and time consuming issues later down the road. A power of attorney will help ensure that everything runs as smoothly and according to preference during an uncertain phase.
If you want to make sure your assets are divided up as per your wishes post-mortem, then creating an estate plan is essential. Nevertheless, many people make mistakes when doing this that can nullify or weaken the effectiveness of their plans. To guarantee a well-crafted estate plan which accurately reflects your desires and safeguards all of your belongings, speak with a professionally trained attorney specializing in estate planning.
Check out this article on the information you shouldn’t forget to put in your will!