Estate planning helps your assets go where you want them, without delays or legal headaches. Yet, even with good intentions, you might overlook essential steps. Missteps in estate planning can cause confusion, delay, and expense for your loved ones. By understanding common errors, you can take proactive steps to avoid them.
Letting your documents go out of date
Life changes often, and your estate plan should reflect that. If you marry, divorce, have children, or experience a major financial shift, update your documents. Outdated wills, trusts, or powers of attorney can lead to unintended outcomes. Beneficiary designations on retirement accounts and insurance policies also need regular review.
Ignoring the risk of incapacity
Estate planning isn’t only about death. You should also plan for potential incapacity. Without a healthcare power of attorney and a durable financial power of attorney, your family may need court approval to manage your affairs. These documents give someone you trust the authority to act if you cannot.
Using only a will to pass on assets
A will is important, but it won’t help your estate avoid probate. Consider adding tools like revocable living trusts or payable-on-death accounts. These options allow assets to transfer directly to beneficiaries without court involvement. Using only a will may create delays and added costs.
Failing to align asset ownership with your plan
How you title assets affects how they transfer. For example, joint ownership with right of survivorship allows property to pass directly to the surviving owner. If you forget to coordinate asset titling with your estate plan, your intentions might not be fulfilled. Ensure ownership aligns with your estate documents.
Not discussing your plan with others
If your loved ones don’t know your wishes or where to find your documents, your plan may not work as intended. Share the location of your estate documents and discuss your general intentions with key people. This transparency helps reduce disputes and confusion.
Avoiding these issues strengthens your plan
Your estate plan should reflect your current wishes and use the right tools to support them. Staying ahead of potential issues protects what you’ve built and gives your loved ones clear direction. A strong plan brings peace of mind, not just for the future, but today.