A solid, up-to-date, estate plan is one of the best things you can do for your loved ones. Despite this, only 34% of Americans have an estate plan.
Not having an estate plan at all is one of the most common mistakes. These are some others to avoid.
1. Not understanding your plan
Some people’s estate plan does not fulfill their wishes because they do not understand how it works. Review your estate plan with an expert to ensure you understand it and then change anything that is not working the way you intended.
2. Failing to update your plan
State and federal laws change over time. If you are not frequently updating your estate plan, some aspects of it may no longer be legal. Additionally, you may need to update your will and other documents to account for marriages, divorces, births, deaths and minor children who are no longer minors. Review your plan at least once every three years.
3. Estate plan creates problems for beneficiaries
Well-meaning people sometimes create problems for the beneficiaries of their estates, such as leaving a home that needs a lot of repairs to a beneficiary who cannot afford to repair it. Discuss your plans with your beneficiaries so that you can make changes before your estate creates a problem for someone.
Not having an estate at all can create significant legal and financial hassles for your family. However, a poorly designed estate plan can also become problematic. Avoiding these common mistakes can make the process easier for everyone.