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Common estate planning mistakes to avoid

On Behalf of | Jun 11, 2024 | Estate Planning |

Estate planning ensures your assets get managed and distributed according to your wishes after you pass away. However, many people make common mistakes that can undermine their intentions and create complications for their loved ones.

By knowing these mistakes, you can avoid them and create a more effective plan to ensure that your estate gets handled correctly.

Not updating your will

Life changes, such as marriage, divorce or the birth of a child, can affect your will. Failing to update it can result in outdated information that does not reflect your current wishes. Regularly review and update your will to ensure it remains accurate.

Overlooking beneficiary designations

Beneficiary designations on accounts such as retirement funds and insurance policies override your will. Failing to update these designations can lead to unintended beneficiaries. Ensure all of this information is current and that it matches your estate plan.

Ignoring tax implications

Estate planning can have significant tax consequences. Failing to consider these can lead to large tax burdens on your heirs. Consult with financial experts to understand how future taxes will impact your estate so that you can plan accordingly.

Not planning for incapacity

Many people focus solely on distributing their assets after death. However, it is also important to plan for incapacity. Establish powers of attorney and healthcare directives to ensure your wishes are followed if you become unable to make decisions.

Failing to communicate your plans

Keeping your estate plan a secret can lead to confusion and disputes among your heirs. Communicate your plans with your loved ones to ensure everyone understands your wishes. Clear communication can prevent conflicts and ensure a smoother process.

Not considering a trust

Trusts can offer more control over how and when your assets get distributed. Failing to consider a trust might result in a less flexible estate plan. Explore whether a trust fits your needs and provides the benefits you want for your heirs.

Avoid these common estate planning mistakes to ensure you protect your assets and provide for your loved ones according to your wishes.