5 Estate Planning Mistakes to Avoid

Even though creating a good estate plan is important, many people find this process to be extremely complicated. A single misstep could end up costing your loved ones quite a bit of money or land your assets in probate.

Here is a quick look at five of the most common estate planning mistakes and some steps that you can take to avoid them.

Neglecting the Advanced Directive

Also known as a living will, an advanced directive establishes your wishes for medical care and end-of-life treatment.

The living will is only going to be carried out when two separate physicians confirm that you are unable to make medical decisions.

Once they have confirmed that you are incapacitated, your healthcare proxy can make decisions on your behalf.

Naming Minors as Beneficiaries

Children under the age of 18 aren’t legally allowed to own property, and that means your assets will go into probate if your primary beneficiaries are minors.

If you want your underage children or grandchildren to be financially comfortable, then you will need to assign them a guardian that you trust. You can also set stipulations on how and when they receive their inheritance after the age of 18.

Not Taking a Comprehensive Inventory

Well before you start your will, you must identify and organize all of your assets. Even relatively minor assets could end up being worth quite a bit of money at some point in the future.

Some of the assets that many people forget to add their wills include cryptocurrency, antique collections, and valuable electronics.

Trying to Complete This Process on Your Own

Planning your estate without an NJ individual wealth management specialist could result in major problems down the road.

Many people don’t realize that a will won’t be legally binding unless it adheres to very specific regulations. A company such as RMR Wealth Builders, Inc. Can help you make decisions on your will, estate, insurance, and retirement funds.

Not Updating Your Will

Once your will is complete, you must update it every two or three years. You also need to update it whenever a major life event takes place.

That includes divorces, the birth of grandchildren, changing careers, and major purchases. Failing to account for those events could result in legal problems after you pass away.

The best way to avoid these mistakes is to speak with a financial specialist as early on as possible. One of those specialists can keep your assets out of probate and help your loved ones avoid unnecessary taxes.

Tags: Estate planning

Category: Family Finances