Estate planning can ensure your assets get distributed to your loved ones according to your wishes. Besides that, your mind will be at peace knowing that your family is taken care of when you're unable. While this step seems easy, you need to work with an estate planning attorney to get everything right. Here are the top four mistakes to avoid when making an estate plan.
1. Putting off the process
One costly mistake that you should avoid is procrastinating estate planning. Some people postpone it to a later date, but they keep pushing it to another day when that time arrives. According to studies, about 42% of Americans have a will. The rest fall into the category of those who don't have an estate plan in place. Always bear in mind that such documents protect you and your loved ones if you pass on. Therefore, if you fail to create an estate plan, conflicts might arise in your family during asset distribution.
2. Not updating the plan regularly
If you already have an estate plan, it's crucial to update it from time to time. For instance, if you move to another state, ensure you change vital information in your will and trust. Besides that, you might need to input new data, such as:
- Birth of a child
- Death of a beneficiary or family member
It would be prudent to revise your paperwork every few years. This way, any significant changes in your life can reflect in the legal documents.
3. Not naming healthcare representatives or power of attorney
A healthcare proxy and Power of Attorney (POA) are crucial in every estate plan. Therefore, you should talk with your estate planning attorney before you assign a person or individuals to make medical and financial decisions on your behalf. In addition, your living will should have a healthcare representative and Power of Attorney. Once you pass on, these roles will no longer be functional. In other cases, you might name a trustworthy person in your life to take care of matters when you're incapacitated.
4. Not assigning a guardian to minors
If you have children under 18 years, they might need a guardian when you or your spouse dies. This person will take care of your kids and ensure they get a proper education. Your estate plan can include how you'd want the guardian to spend your children's assets. However, before you name a suitable guardian, inform them beforehand. It could be a close friend or a trusted relative.
Ultimately, estate planning is essential to secure your family's future in your absence. Therefore, ensure that you work with an estate planning attorney to avoid any of the above missteps.