Estate planning is a way for adults to ensure they’re doing what they can to care for their loved ones after they die. There are several different things to think about if you’re trying to make sure you have everything in order.
An estate plan can include a will and trusts that provide instructions for where your assets go. They can also include powers of attorney designations and other supplemental instructions. You must avoid these three estate planning mistakes as you create your plan.
1. Failing to make a comprehensive estate plan
One of the biggest mistakes an adult can make it thinking they have plenty of time for creating the estate plan. You never know when something will happen to you, so it’s best to get things together as soon as possible so you don’t run the risk of your estate having to be handled through intestacy laws.
2. Naming assets in multiple locations
Each asset should only be put in one place in your estate plan. This ensures that there aren’t any conflicting instructions. You should also make sure that assets, such as checking accounts, aren’t named in the estate plan if they’re covered under a payable-on-death designation.
3. Forgetting to plan for incapacity
Failing to appoint someone to make financial and medical decisions for you if you become incapacitated is a huge error. Not having anyone to make financial decisions could mean that your estate value drops, which means your beneficiaries receive smaller inheritances. Not having someone to make medical decisions for you could mean that you miss out on critical care that you need or that your loved ones are left to battle over decisions.
A comprehensive estate plan can provide you and your loved ones peace of mind. Taking the time to get it together sooner rather than later minimizes the risk of something happening to you before it’s set up.