Have you ever thought about what you’d like to happen to your assets after you’re gone? Chances are you’ve given it at least a little thought. Maybe you joked with your child about the inheritance they’ll get one day. Or perhaps you know that you’d like a cherished heirloom to stay in the family.
Thinking about estate planning is a good start. To make sure your wishes are followed, however, you have to take action. As you begin to think about what your estate plan should look like, make sure to avoid these common mistakes.
1. Picking the wrong executor. An executor is in charge of making sure your will is carried out as you intended. While it should be someone trustworthy, it should also be someone who is organized, is willing to commit the necessary time, and is not likely to outlive you.
2. Failing to think carefully about your heirs. Not everyone is capable of handling an inheritance wisely. As you think about who your heirs will be, consider also whether they are responsible enough to use what you’re passing down appropriately.
3. Not utilizing a trust. If you do have heirs who may not handle an inheritance well, a trust is a great option. By putting your assets into a trust, you can decide how old the beneficiary must be to access it, or even decide what they can use it for. Establishing a trust can help you better protect both your heirs and your assets.
4. Forgetting to update your will. The point of creating a will is to make sure your estate is distributed the way you want it to be. Failing to make changes to your will as they are necessary, can nullify the effort you put in to create a will in the first place.
Just imagine if you went through a divorce and then remarried but forgot to name your new spouse as a beneficiary in your will. If your will still names your ex, your current spouse will have some major headaches to deal with. You should consider updating your will after all major life events, including the birth of a child, the death of a beneficiary, marriage and divorce.
Don’t let your hard-earned money or precious family assets go unprotected. Creating a well-rounded estate plan will protect your assets, provide for your heirs and give you some peace of mind.