Setting up your estate plan requires you to think carefully about what you want to happen when you pass away. Your loved ones will use the plan to determine how to handle your assets. Many people don’t realize that an estate plan is much more than that.
Your estate plan will also provide your loved ones with a plan for what will happen if you become incapacitated. Having everything prepared now can save everyone a lot of trouble in the future. Be sure you don’t make these estate planning mistakes.
#1: Bypassing end-of-life planning
Setting the power of attorney designations and writing out the advance directive help your loved ones care for you if you’re incapacitated. Think carefully about these so you can ensure you have appropriate people named who will put your interests first.
#2: Including assets with alternate designations
Some assets, such as financial institution accounts, have documents that tell the institution what to do with the accounts when you pass away. These are known as Totten trusts or payable on death designations. Accounts with those shouldn’t ever be included in the estate plan because they’ll be handled according to the designation.
#3: Failing to tell your loved ones about your plan
Talking about your estate plan isn’t a pleasant thing, but talking to the people named in your estate plan can help them to get clarification about your wishes now. This is especially important for your executor and the people you name on the power of attorney documents.
Making sure you have everything in order in your estate plan is crucial, so be sure you get it all handled as soon as possible. Working with someone who can help you to do this can help you have peace of mind.