Many people overlook the importance of estate planning. According to a recent study from BMO Wealth management, 52 percent of American adults do not have a will, 40 percent have not discussed their estate with their family, and only 28 percent are aware of their parents’ wishes regarding their estate.
Some people treat their estate as a mere legal technicality to be dealt with in the future when they are elderly. But this mindset can be a huge, costly mistake. In fact, it is one of the single biggest mistakes to be made in estate planning. You can avoid this error–and several others–by taking a look at these common mistakes in estate planning:
Ignoring the paperwork
Make sure that all of your estate’s legal documents are in accordance. Slight differences between documents can cause massive legal headaches for your loved ones.
Not updating the plans
Estate plans should be updated regularly to keep up with your life developments. Perhaps you have a new grandchild, or you have accumulated new assets. These changes should be incorporated into your will.
Giving too much, too soon
Parents sometimes want to give their children as much as possible, as quickly as possible. This isn’t always the wisest choice. Even mature beneficiaries can inadvertently squander their inheritance. Take your time in considering what to leave your children, and when.
Not funding a trust
A trust is not much use if there is nothing in it. Take the step of funding any trusts that you set up so that the recipients are not left empty-handed.
Skipping the will
A will is not necessarily the most important piece of an estate plan, but it is important. This document can do more than just dispense money. It can name the legal guardians of your children, dictate your end-of-life medical care and plan your funeral arrangements, so do not neglect it.
Underestimating human nature
Estate-planning experts say that many people underestimate the unpredictable and temporary nature of life–meaning, no one anticipates that a tragedy could happen to them. In truth, life is short and unpredictable, and you should remember this when planning your family’s future.
Having no plan at all
Perhaps the single most significant mistake in estate planning is to have no estate plan at all. Younger and middle-aged couples often neglect estate planning, putting their family’s future at risk. An experienced attorney can help you plan your estate today.