Even if you devote the necessary time and attention to estate planning, there is no guarantee that you’ll take all the right steps the first time around. With so many mistakes lurking, you need to carefully consider every decision you make.
Here are five of the most common estate planning mistakes:
- Skipping it altogether: You have the legal right to do this, but it’s not in your best interest. A comprehensive estate plan will ensure that your assets end up with the right person. It also allows you to plan for the future, such as through the creation of a living will and appointing a power of attorney.
- Forgetting to update your estate plan: You’ll feel better after you create an estate plan, but don’t forget to review and update it as necessary. For example, you’ll need to do this if you marry, divorce or bring a new child into your family.
- Neglecting to plan for disability: You could become disabled at any time as the result of an injury or illness. There are estate planning steps you can take to protect yourself, such as naming a power of attorney to make decisions on your behalf.
- Not naming a guardian: Your children are likely to be a big part of your estate plan. If you have any children under the age of 18, make sure you name a guardian to care for them in the event of your death.
- Overlooking ways to reduce your estate tax: There are many strategies for reducing estate tax, such as gifting money to your spouse every year.
The best way to prevent estate planning mistakes is to obtain legal guidance, understand your legal rights and review your plan regularly.