Estate planning is the process of organizing one's financial affairs and assets in order to ensure they are managed according to their wishes after their death. Estate planning is important to ensure that assets are protected and distributed according to the wishes of the deceased. Unfortunately, there are some common mistakes people make when creating their estate plans, which can lead to unforeseen consequences. Here are some of these mistakes and how to avoid them.
Not Creating a Plan: One of the most common mistakes people make when it comes to estate planning is not creating a plan at all. Even people with small estates should create an estate plan in order to ensure their assets are managed according to their wishes. Without an estate plan, assets may not be distributed according to the wishes of the deceased and may be subject to probate.
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Failing to Update the Plan: Another common mistake people make when it comes to estate planning is failing to update the plan. As life circumstances change, such as marriage or the birth of a child, it is important to update the estate plan to reflect these changes. If the plan is not updated, assets may not be distributed according to the wishes of the deceased.
Not Naming Beneficiaries: When creating an estate plan, it is important to name beneficiaries for all accounts and assets. If a beneficiary is not named, these assets may be subject to probate, and it may be up to the court to decide how they are distributed. This can be a lengthy and expensive process.