You have worked too hard in building up your estate to leave any of it to chance.
Unfortunately, it is all too easy to make simple mistakes that could wind up costing your family not only heartache, but money to sort out. Here are 5 mistakes that you need to avoid when planning your estate.
- Don’t procrastinate!
According to a study from BMO Wealth Management, more than half of American adults have not made a will and close to half of that number haven’t even informed their family of their wishes. Unfortunately, if you don’t have an estate plan, you run the risk of having your assets go through the probate process where it will then become the job of the court to sort out who gets what.
- Don’t let your beneficiaries get out of date.
Life can change quickly and as such, your estate plans can easily get away from you. This is especially true in today’s world where divorce rates are higher and blended families are becoming more and more common. As your life changes, you need to make sure that your estate plan reflects these changes and takes them into account. Most people don’t realize that the beneficiary listed in an account takes precedence over the instructions in a will. There have been cases where former spouses have received death benefits or retirement assets meant for the current spouse simply because the account owner didn’t update their beneficiary in their documents.
- Don’t assume that you don’t have enough assets to make an estate plan worthwhile.
This is an all-too-common mistake especially for younger people who believe that, since they don’t own a house or don’t have that much in the bank, they don’t need an estate plan. The truth is that an estate plan covers much more than just the money in the bank but also how any life insurance policies are handled and how retirement plans are processed.
- Failing to communicate your wishes with your family.
Regardless of how clear your intent may be in your estate plan, it is vitally important for your wishes to be communicated with your family. As uncomfortable as this might be, it is just as important for your family to understand the spirit of the wishes, not just the letter. By doing so, you can (hopefully) eliminate any arguments over what you truly intended.
- Don’t put your important papers in a drawer or a “safe place” that only you know about.
Having a complete and thoroughly planned out estate will not do anyone any good if nobody knows where it is. You need to periodically go through your legal documents to make sure that all of the required information such as a copy of your most recent will, bank and mortgage accounts, insurance forms, and the like are put together and placed in a safe location. The executor of your will should be informed of where these documents are as well.
Handling all of the details of your estate can be a complex and daunting process. This is where working with an experienced attorney can be a great asset. The team at The Matus Law Group is well-versed in estate planning and estate law. Call us today at (732) 281-0060!