It is typical for individuals to think about how to guarantee the financial stability of those who matter to them after passing on. Estate planning exists to fulfill this requirement while maximizing potential savings based on the individual’s life situation and financial status.
However, some decisions regarding the estate might be more costly than beneficial. Some mistakes could put your assets in trouble, jeopardizing your preparations concerning your estate. If you decide to put estate matters in order, make sure to avoid making these expensive mistakes:
- Inappropriately funding trusts: If improperly funded, the assets invested in the trust might not even reach your beneficiaries.
- Inaccurately assigning beneficiaries: Name the beneficiaries correctly to avoid disrupting the flow of assets.
- Inadequate estate value to cover the items in your will: You might leave nothing to your children due to excessive cash gifts.
- Failing to consider estate taxes: It is vital to keep taxes in mind to prevent your beneficiaries from shouldering them.
- Overlooking necessary estate plan updates after a divorce: Name your most recent spouse as the beneficiary to avoid costly lawsuits.
- Keeping an old will: They could require regular reviews and modifications based on recent life changes.
- Miscommunicating intentions and changes to family members: Failing to keep them updated on your decisions could lead to conflicts and disputes between family members.
- Failing to fulfill each process requirement: Your will could only be valid if you complete all steps or requirements.
- Writing a will alone: Having sound legal counsel could ensure it is valid and enforceable.
- Failing to create an estate plan: Without a will or estate plan, the court will distribute your assets without considering your wishes.
These mistakes could add stress and obstacles that could overwhelm your beneficiaries.
Focusing on what is important
Your family needs time and space to grieve when you pass on. They might not be capable of doing so if they might stress over what happens to your estate. By making an estate plan, you are also lifting a heavy burden for the people you love, so they can focus on grieving and recovering from the loss.