Effective estate planning can protect your interests and your assets while ensuring that you’re loved ones will be supported as you see fit. It sounds simple enough, but there are enough complexities involved in the estate planning process that several mistakes can be made, any one of which could jeopardize the legal validity and effectiveness of the plan that you’ve worked hard to create.
When this happens, a lot of things can go wrong. Your assets could wind up in the hands of those you don’t trust, your estate assets can be eaten away by taxation and other avoidable costs, and those you don’t know could be in charge of your financial and healthcare decisions. If you don’t want that to happen to you, then you need to know how to avoid costly mistakes during the estate planning process.
Watch out for these mistakes when creating your estate plan
The estate planning process is what you make of it. Although that can provide a lot of comfort, it also opens the door to error. So, as you navigate your estate plan, be aware of these mistakes so that you can take the necessary precautionary actions to avoid them:
- Procrastinating: If you wait too long to create your estate plan, then you risk passing away without one in place. In these circumstances, assets are distributed according to the state’s intestate succession laws, which may not align with your wishes. Procrastinating in the creation of your estate plan can also leave you susceptible to becoming incapacitated without someone you trust in place to make important financial and health-related decisions on your behalf.
- Failing to modify: Although you might feel a sense of relief and security once you create your initial estate plan, the estate planning process doesn’t end there. You need to revisit your estate plan from time-to-time to make the changes necessary to keep your it in line with your vision of the future. For example, if you forget to update your estate plan after a divorce, then your assets could end up in the hands of your former spouse.
- Skimping on the formal process: A lot of people think that they can create their own estate plan without the help of an attorney. However, there are strict requirements that must be met when an estate plan is executed, otherwise it can be successfully challenged and subsequently deemed legally invalid. So, don’t cut corners when it comes to creating your estate plan.
- Not discussing your estate plan with your family: While talking about your estate plan with your loved ones isn’t required, it can certainly temper expectations and avoid potential infighting. This could reduce the risk of probate litigation and prevent the damaging of relationships that are important to you and your loved ones.
- Not taking long-term care into consideration: Statistically speaking, there’s a decent chance that you’re going to need long-term care at some point in your life. This might be in the form of a nursing home stay or intensive in-home care. Either way, it can be costly. If you don’t take this into account when creating your estate plan, then your assets can be quickly eroded away by these expenses.
Get the most out of your estate plan
There’s a lot that an effective estate plan can do for you and your loved ones. However, to take advantage of these benefits, you have to know how to navigate the estate planning process. That’s why if you’d like more information about what it takes to successfully create the estate plan that’s best for you, then now is the time to find answers to your lingering questions.