Estate planning is not something you should take lightly. Mistakes can render ineffective the careful plans you have made for your estate after your death, putting your legacy at risk. This may also lead to confusion and disputes among your loved ones, which is not what you had envisioned.
Therefore, it helps to steer clear of these common blunders many make when crafting your estate plans.
Failing to update your estate plans
As life changes, so should your estate plans. Having an outdated estate plan can lead to complications like unintended beneficiaries, assets being left out or disagreements among your heirs and beneficiaries. It is best to revise your estate plans every couple of years or after significant life events like the birth of a child, divorce or marriage and ensure everything is current.
Not planning for incapacitation
Preparing for unexpected events like incapacitation when making your estate plans is equally crucial. An illness or injury could seriously limit your physical or cognitive capabilities, and it’s prudent to have the necessary plans in case this happens.
For instance, you can appoint someone to manage your financial or healthcare affairs and make decisions for you when you are incapacitated.
Overlooking estate taxes
Ignoring the tax implications of your estate plans could result in unnecessary taxes for your heirs, reducing the amount of assets they receive. Familiarizing yourself with the tax consequences of your estate plans and the strategies you can use to minimize taxes can save your estate a fortune.
DIY estate planning
It may be tempting to use pre-existing templates for estate planning because they are seemingly cheaper and more convenient, but this is ill-advised. DIY estate planning can lead to legal errors or documents that are not enforceable. It may also not account for your circumstances and objectives or changes in the law.
Reaching out for legal guidance when crafting your estate plans can help you avoid these and other estate planning pitfalls that may risk your legacy. It will also give you peace of mind that everything is in place when the time comes to pass down your estate.
