Your estate plan helps create a legacy after you are gone. It also ensures your family has the financial support they need when you can no longer assist them.
Because the stakes are so high, you must be aware of common estate planning mistakes. Even seemingly minor issues can have disastrous results, especially when a family member chooses to contest a will. Here are a few mistakes to avoid as you create your plan.
Leaving money to a minor in your will
Minors cannot accept inheritance money. Instead, a guardian must handle the money for them until they reach the legal age. Accordingly, you should specify a guardian if you plan on leaving money to a person who is currently a minor. Specifying a guardian ensures the minor has a trustworthy person in their corner should the unthinkable happen.
Forgetting to review beneficiary designations
Certain assets actually bypass your will and go directly to your heirs upon your death. Life insurance policies, retirement plans, and other assets use beneficiary designations, which you fill out when you initiate them. Beneficiary designations are independent of your will, which means you must review them on a regular basis. If the information in your will conflicts with what is on these accounts, beneficiary designations supersede all other information.
Neglecting property and assets
It is possible to forget about certain property and assets, especially if you created your estate plan decades ago. If you fail to include these items in your will, the court will decide how to hand them out to your heirs. Adding a residuary clause to your will ensures that the court disperses forgotten or neglected assets to your heirs as you desire.
Along with the above tips, you should also review your entire estate plan every three years or so. Situations can change drastically over the course of your life, and regular reviews ensure that your plan still meets your needs.
