You probably already know how crucial an estate plan is for your assets and family. Develop a solid and legally binding plan is equally important, as this will prevent family members from contesting it.
According to Kiplinger, certain estate planning mistakes are quite common. Being aware of these mistakes is the first step to avoiding them, and this guide can help you do just that.
Forgetting to update your estate plan
Your estate plan must change alongside your life. New situations, such as marriage, divorce, the birth of a child, or even moving out of state should trigger a comprehensive review. Even if there are no significant changes, it is still recommended that you look over your plan every three to five years or so to ensure it continues to meet your needs.
Not thinking about long-term care
If you need placement in a nursing home or assisted living facility, exorbitant costs are often a factor. Fortunately, disability and long-term care insurance can provide funds for these services, which ensures you receive the proper care as you grow older. Long-term care insurance also takes the burden off your family, who will need to fund services themselves if you do not have a plan in place.
Neglecting beneficiary designations
Life insurance policies and retirement accounts allow you to fill out beneficiary designations, which dictate who among your heirs receives the proceeds after you die. These designations take precedent over all other estate planning documents, including wills and trusts. If there is a discrepancy between what your beneficiary designations and will say, the court will go with the information included on the former document. That is why you should review them along with the rest of your estate plan every three to five years.
Taking the DIY route is another common mistake estate planners run into. Even simple estates can have complexities when it comes to inheritances, so it is best to seek out professional assistance when developing these crucial documents.