Regardless of your age or financial status, you must have a solid, legally binding estate plan in place. According to Kiplinger, it is equally important to avoid certain estate planning mistakes when making decisions.
Keep in mind, your estate plan not only protects your assets, it also safeguards your family. Here are a few smart ways to avoid common errors and enjoy peace of mind.
Make sure your plan is legally binding
Many people use DIY will services or simply write down their estate planning desires in the hopes that these steps are sufficient. However, most people require professional assistance with will creation, especially those with more wealth and assets. In addition to making sure the terms in your will are legally binding, professional assistance can also help mitigate taxes. This is crucial if you’re leaving heirs large sums of money.
Revisit your plan over the years
Your estate plan must grow and evolve along with your life. Major life changes require a review of your current plan to ensure it continues to meet your needs. Revisit your plan after new marriage, divorce, the birth or adoption of a new child, a change in financial status, or purchasing a new asset. You should also conduct a review if you moved from one state to another, as state laws can dictate will creation.
Choose a guardian for your children
You can use your will to name a guardian for minor children in your care in case the unthinkable happens. If your estate plan lacks this information, the court will choose a guardian on your behalf. While it is true the court makes all decisions in the best interest of the children, most parents prefer making the decision on their own.
Remember, life insurance policies and retirement accounts also play a role in your estate plan. Make sure you have a good understanding of all aspects, so you can take the proper steps to make changes when the need arises.