The human brain is quite remarkable. As a protective measure, it shields us from contemplating our own mortality. The brain simply does not accept that death applies to us, but only to other people.
Perhaps this is why more than 68% of Americans do not have a will.
Yet, when asked, ensuring our partners, spouses, and children are taken care of after we pass is a high priority for most individuals. So, when the time comes to prepare for the inevitable, making sure you have a solid estate plan in crucial.
Here are the top five common estate planning mistakes:
Not Having a Plan – A real plan includes having a will or trust in place. Without these items, not only do you leave the decision of where your assets go in the hands of the State. The same is true for important decisions in the event you are no longer able to make decisions due to health reasons.
Not Keeping Plans Current – If your will or trust is collecting cobwebs in a safe deposit box somewhere, it may be time for a thorough review. Our life changes, along with our assets and our ambitions. Regularly reviewing your estate plan will help guarantee your wishes are met should they change over time.
Not Updating Beneficiaries – Families grow and shrink over time. So too do our feelings for those we care about. Whether you are wanting an equitable distribution of your assets or not, your beneficiary designations determine how many assets will be allocated.
Not Accounting for Estate Taxes – One constant in life, besides death, is taxes. Ever changing, estates taxes could come as a surprise to your beneficiaries if not considered within your estate plan. Due within 9 months of passing, the IRS will want their money.
Not Planning for Children – You may want to provide children or grandchildren with a portion of your inheritance. However, if they are a minor, they may not be given access and instead have control relinquished to their guardian. This may undermine your intentions of providing younger beneficiaries any financial bequest.
Estate planning is not just for the wealthy, but for anyone who wishes to retain decision-making control if incapacitated or owns assets with a family who may have claim to them. Take a moment to ensure you retain control of your end of life as you do today.