Estate planning is an incredibly important and complex process. It allows you to make plans for the future, pass your assets on to your heirs and generally provide guidance to your family concerning your wishes and priorities. When you pass away, this plan can help them to better ensure that those wishes are honored.
Unfortunately, people often make mistakes when doing their estate planning. To help you avoid the same errors, consider what these mistakes are and why they occur so often.
Not making an estate plan
The top issue is simply that people too often fail to engage in estate planning at all. They may put it off, procrastinating it and assuming that they’ll do it later. They may think that they don’t need an estate plan. For whatever reason, someone who passes away without a plan is making things far more complex for their family, and risking that their own wishes will not be honored. As a result, your efforts to engage in estate planning will put you ahead of the curve.
Neglecting medical care
Another potential issue occurs when people only focus on their assets when estate planning. They might not plan for what happens if they become disabled or incapacitated. Ideally, you’ll want to use some type of advance directive. You may use a medical power of attorney, for example, to give an agent the power to make your medical decisions in the event that you are so ill or injured that you can no longer advocate on behalf of your own interests. You could also use a living will to spell out some of your own medical wishes in advance. But the biggest issue is simply that people skip this step and only focus on the distribution of their assets after death.
Choosing the wrong estate administrator
Finally, it’s important to choose the right person to be your estate administrator or the estate executor. You’ll need someone who is able to handle complex and sometimes intellectual topics, someone who is organized and detail-oriented and someone who is nearby and willing to take on this role. They are the one who will inventory assets, distribute them to your heirs and settle your debts. You can make an estate plan, but your administrator is the one who ensures that it is followed, and you need to know that you have someone you can trust. When people make this choice in ways that aren’t truly thoughtful, problems can arise.
Creating your plan
These are three examples of mistakes you’ll want to avoid when making an estate plan. As you get the process underway, be sure to seek legal guidance in order to better ensure that your estate planning documents meet your needs and are legally enforceable.