Everyone should have a solid estate plan in place, regardless of age or level of wealth. You may think you don’t have anything, but what if you died holding the winning lottery ticket? Estate plans protect your assets, but they also provide peace of mind to your family.
Estate plans can even offer benefits while you are still alive, provided you develop valid, legally binding documents. Kiplinger explains the most common estate planning mistakes, so you can take the proper steps to avoid them.
Not establishing a plan for minor children
Along with creating a plan for your assets, a will can also create a plan for your minor children. By establishing guardianship, you can rest assured your children are in good hands in the event of the unthinkable. Without guardianship established, the court will make a decision on its own. While decisions are in the best interest of the children, there is a chance they could go against your wishes.
Not updating the plan
Your will should change along with your life. You should perform a review after every major life event, including new marriages, divorces, the birth or adoption of a new child, or the death of a beneficiary. You should also perform a review after moving to a new state, as laws may have changed. A general review is also recommended every few years or so.
Not factoring in long-term care costs
In the event your medical needs become complex, you might require long-term care in a nursing home or assisted living facility. These facilities can incur huge costs, so your estate plan should include a strategy for implementing suitable long-term care. For example, disability insurance can can cover things like home health aides or even stints in rehab centers.
While no one wants to think about their own mortality, an estate plan offers protections cannot pass up. If you have children, own property, or are accruing assets, you should create a plan sooner rather than later.