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Avoid these 5 mistakes with your estate plan

On Behalf of | Nov 27, 2021 | Estate Planning

If you have an estate plan, you have every reason to be proud of yourself. Taking this step will relieve your loved ones of the confusion and uncertainty of intestacy. However, while having an estate plan may give you confidence that you have accomplished a good thing, you want to be certain that your plan will not be the cause of frustration for your loved ones. Often, this frustration is the result of critical errors in the plan.  

Across the country within the next 25 years, more than $68 trillion will pass to the next generation. If your wealth is part of that staggering total, you certainly want to be sure your estate plan protects your assets and your heirs. If you have especially complex assets or your family situation is complicated, your estate plan probably won’t be a simple one. Nevertheless, even simple estate plans can include common mistakes. 

Preserving your legacy 

A frequent mistake people make after creating an estate plan is to lock it in a safety deposit box and forget about it. Estate plans are living documents that you must examine and update as your life changes. This includes periodically reviewing the names of those you have chosen to be your agents, powers of attorney and beneficiaries as well as the assets in your will and trusts. Additionally, if you answer yes to any of the following, your estate plan may cause confusion after your passing: 

  • Have you neglected to name beneficiaries for your retirement funds, investments and other accounts that may override your will? 
  • Do you have a minor child listed to receive an outright inheritance instead of establishing a trust? 
  • Do you have a trust to which you have failed to fund any of your assets? 
  • Does your trust include instructions that contradict the directives in your will? 
  • Do you still have to convert your traditional IRAs or 401(k)s to Roth products so your loved ones will not have to face potentially exorbitant tax burdens? 

Of course, the most common and possibly the most serious mistake people make is neglecting to create any kind of estate plan. Even a simple will or power of attorney document can spare your family from having to face the probate process without your directions. It can also relieve them of the painful struggle of making decisions about your life and death without guidance from the wishes you can express in your well-crafted estate plan.