Estate planning might not be on your mind right now, but you should plan ahead to secure your future and the well-being of your loved ones.
However, even with the best intentions, mistakes can happen.
Neglecting to create a will
A will is an important document in your estate plan that outlines your wishes regarding the distribution of your assets after you pass away. Failing to create a will can lead to confusion and disputes among your family members. Draft a clear and comprehensive will that reflects your wishes.
Forgetting to update beneficiary designations
Life changes, such as marriage, divorce or the birth of children, can impact your beneficiary designations. Failing to update these designations can result in unintended consequences. Regularly review and update your beneficiary designations to reflect your current circumstances.
Not planning for incapacity
Did you know 67% of Americans overlook the importance of estate planning? However, these documents are not just about what happens after you pass away. It is also about planning for potential incapacity during your lifetime. Failing to establish powers of attorney for healthcare and finances can leave you vulnerable in the event you become unable to make decisions for yourself. Designate trusted individuals to make healthcare and financial decisions on your behalf if you cannot do so.
Overlooking tax implications
Taxes can significantly impact the distribution of your estate. Failing to consider tax implications when planning your estate can result in unnecessary taxes and reduced inheritances for your loved ones. Consult with financial advisors or tax professionals to minimize tax liabilities and maximize your estate’s value.
As you create or update your estate plan, discuss your plans openly with your loved ones to ensure everyone understands your intentions and reduce the likelihood of disputes arising later on.