Ensuring the well-being of loved ones after a person passes away is important. Mourning a loss should not include financial burdens or family disputes over assets. According to CNBC, 67% of Americans do not have a will or estate plan.
This can leave families vulnerable after major life events. Therefore, ensuring the well-being of loved ones should be a top-of-mind priority for all heads of family. This way, you can avoid unnecessary financial burdens or family disputes over assets.
It can be tough for anyone to decide on the best way to give away their belongings after passing. Regardless if you’re young, old, single or married, it’s vital to prepare an estate plan. Whether a home’s size, car value, or family has little to pass on, an estate planning document should be in place for each adult.
Some may argue that estate planning starts with a will. Others may say one may need a revocable or irrevocable trust.
The truth is that the planning process can get tricky, which may cause some critical errors. You can start by making an informed decision with the help of basic knowledge. Keep reading to learn the common mistakes to avoid when planning your estate.
5 Worst Estate Planning Mistakes
1. Delaying Estate Planning
One mistake people make is putting off estate planning, thinking it’s unnecessary because they don’t have many assets. These fallacies may cause many families to enter probate or long court battles over a considerably small asset.
Putting an estate planning checklist together can help avoid delays. This checklist will allow the organization of assets and proper preparation to distribute the estate according to your wishes.
2. Not Establishing Health Directives
Being prepared for unforeseen circumstances is an important aspect of planning for the future. One of the most crucial decisions you can make is designating a healthcare power of attorney. They can make decisions about your medical treatment if you become incapacitated.
Providing a copy of this designation to the chosen agent and your primary doctor is vital in estate planning. In this manner, everyone is aware of your wishes, and it avoids arguments.
3. Leaving no Financial Directives
It’s important to plan for the possibility of incapacitation by designating a financial power of attorney. This person will be responsible for implementing your financial plan if you are unable to do so yourself.
You should choose your financial power of attorney agent carefully. You will need to trust that they can make important financial decisions on your behalf. This includes handling bills, managing investments, and making decisions about your retirement accounts.
Consider a best friend or close family member who understands your values and estate plan well. You may also want to consider having a backup if the primary agent cannot fulfill their duties.
4. Not Designating and Updating Beneficiaries
Life happens—divorces, births of new children, and grandchildren. Updating beneficiary designations in wills, trusts, life insurance policies, and other estate plans when life changes are necessary. You should have a plan to update the inheritors regularly to avoid family disputes upon death.
5. Not Informing Heirs an Estate Plan Exists
All legal documents in an estate plan are a guide that heirs can use to distribute assets. The beneficiaries can provide estate management according to the deceased’s desires. Having a copy or knowing where to find information is important. This way, they can distribute assets accordingly and ease some of the stress during a difficult time after the loss of a loved one.
Getting Professional Advice when Estate Planning
You should always consider the advice of an estate planning attorney. Moreover, Amerant Bank Trust Services offers asset protection and dynasty trusts, which you should consider adding. This helps lessen possible mistakes to avoid when planning your estate.
An estate plan is a good start, but the next step is to have a partner who can administer the estate and manage assets like a financial advisor. Learn more at amerantbank.com and follow Amerant on Facebook, Twitter, Instagram, and Linkedin @AmerantBank for financial tips, special offers, and upcoming events.
