Estate planning involves the careful creation of legal documents that protect someone about later in life and the people that they love after that. Given that you have to consider your future death, you may have avoided creating an estate plan or rushed through the process.
Constantly delaying the creation of your estate plan is probably the most common mistake that people make. Other than dangerous procrastination, numerous other mistakes can affect someone’s legacy and diminish the protection that estate planning offers.
Only thinking about your death
A will or trust is a valuable document, but it is far from the only protection that you require. You never know when you could suffer an aneurysm or get injured at work and wind up in a coma. Powers of attorney and advance healthcare directives are valuable inclusions in estate plans that many people forget.
Giving children or troubled family members direct inheritances
A will makes it easy to bequeath specific belongings to specific people. You may want most of your property to pass to your children when you die.
However, when your children are still minors or when they have a history of dangerous or irresponsible behavior, like drug use, a direct inheritance may do more harm than good. They could wander it on a dangerous binge.
Minors left an inheritance may watch their guardian squander the property you wanted them to receive. Moving that property into a trust prevents a beneficiary from misusing it or the future guardian of your children from wasting that inheritance.
They don’t address residual property
No matter how thorough you try to be, there will inevitably be assets that you didn’t move into your trust or include in your will. Adding a clause to your estate plan that addresses the residual property in your estates will clarify what should happen with the remainder of your assets.
They leave contradicting instructions
All of your estate planning documents should support one another. If you don’t review and update all of the document at the same time, you could create plans that contradict each other. Making sure that all of your beneficiary designations and documents match is important when you create a thorough estate plan.
Learning from the most common estate planning mistakes other people make can help you create the most effective plan for your needs.