Estate planning is something most people avoid, but it is one of those things that everyone needs to do. There are a number of mistakes that occur during estate planning, but by being prepared you can make sure your estate doesn’t fall into these typical pitfalls.
No Estate Plan
Too many people neglect to create estate plans. Even if you feel your assets aren’t large enough, consider this: if you don’t have an estate plan, the state decides where your assets go. Touchy situations, such as guardianship of your children, can also be left in the court’s hands.
Ignoring the New Laws
Laws change every few years, but if you ignore these changes you might be surprised to learn how your estate plan no longer protects your estate. Stay up-to-date on any legislative changes that might alter your estate plan and contact your estate planning attorney for assistance.
Your will states who will inherit what, but did you know that doesn’t apply to accounts with beneficiary designations? If you have IRAs, 401(k)s and bank accounts, the forms you fill out stating a beneficiary take precedence over your estate plan. Therefore, check your beneficiaries and adjust where necessary.
Regardless of how much you make each year, you need to carry adequate life insurance coverage. Even a low-income household could benefit from some sort of coverage to replace income losses and cover the costs associated with funerals. Discuss your life insurance needs with your estate planning professional and enlist the help of an insurance agent to make sure you’re covered.