Qualified financial advisors will tell you the most common estate planning mistakes can be avoided by simply knowing what to look for. In this guide, we walk you through the mistakes most people make, so you’ll know what to avoid.
Mistakes to Avoid in Estate Planning
One of the best things you can do when creating an estate plan is to make sure you establish one that is mistake-free. While this might sound like it’s easier said than done, the benefits of carefully crafting your estate plan are essential to your success.
Not Planning Ahead
The worst mistake people make is not giving their estate plan the time needed to ensure it’s a solid plan to begin with. Your estate plan should take top priority in your life. In doing so, you won’t feel rushed to have it completed.
Whenever you’re rushed to create your estate plan, mistakes are bound to occur. And when this happens, you can bet that your plan will be full of holes and errors.
Rather than serving to protect your loved ones after your death, your estate plan will only cause them unnecessary strain.
Leaving Out Loved Ones
It’s understandable that some loved ones don’t need to know about your estate plan. But for the most part, it’s important to take the time to fill in those who are affected so they will know what to expect.
The last thing you want is for your estate plan to be a burden on those whom it is designed to protect. What is more, a quick discussion will help iron out any disagreements before your passing.
If it is evident there are loved ones who are going to contest your estate plan after you die, you can write in an option that takes out those individuals. Speak with a trusted financial planning firm to assist you in this process.
Having Only One Beneficiary
If you want to avoid potential problems before you pass away, it is important you designate more than one beneficiary. Something unexpected could happen where your only beneficiary dies before you do.
Having a contingent beneficiary in place will ensure your assets are well cared for after you pass away.
Leaving Out Power of Attorney
If you are working with a financial planning firm, they should inform you of the importance of naming a Power of Attorney. This could also include a healthcare representative or healthcare surrogate to ensure the best decisions are made in the event you become incapacitated.
Failing to Plan for Final Arrangements
Lastly, many people fail to plan for their final arrangements. You do not want your grieving loved ones to be left with the burden of trying to figure out your final arrangements. By taking the necessary steps to establish these well ahead of time, you can ensure a smoother transition for all parties involved.
In addition, take time to name your wishes concerning end-of-life care, such as hospice. By you being the one to establish what happens to you toward and after the end of your life, you can effectively take that burden off your loved ones’ shoulders.
Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.