Estate planning ensures the proper distribution of assets after you are no longer around. Accordingly, mistakes during the estate planning process can lead to many complications and unintended outcomes. Here are some important pointers that can help you sidestep common estate planning errors.
Clearly define your wishes
One of the primary mistakes people make is not stating their wishes explicitly within estate plans. It is important that you are precise about who should inherit what. This helps prevent disputes among family members and ensures your belongings go to the right people.
Choose the right executor
An executor is the person responsible for carrying out your estate plan. As a result, you must choose an executor carefully. This person should be responsible, well-organized and capable of handling all the responsibilities of the role.
Account for all assets
Some assets might be easily forgotten or overlooked. That is why you must account for all your possessions, including bank accounts, real estate, investments and personal items. This prevents unintended omissions from your plan.
Do not forget beneficiary designations
Assets kept in retirement accounts and life insurance policies often have designated beneficiaries. Be sure to keep these designations up to date, as they override your will’s instructions.
Regularly update your plan
Life is dynamic, and so are your circumstances. Failing to update your estate plan can lead to outdated provisions. While you should review your plan every three years or so, be sure to update it when there is a change in your family, assets or financial situation. CNBC reports that 67% of U.S. residents did not have an estate plan in place in 2022. Remember that these documents are important and that estate planning requires attention to detail and careful consideration. By avoiding common mistakes, you can ensure that your loved ones receive your assets according to your wishes.