Whoah, estate planning – those are some heavy words! What does “estate planning” truly mean? Estate planning is really a synonym for creating a plan for what will happen to your assets when you pass. You want to ensure your assets stay protected for your loved ones. After all, no matter the size of your estate, you worked hard to build it and should have a say in the distribution process!
Unfortunately, this process can be daunting and needless to say not usually very high on people’s priority list. However, even though it’s a bit of a morbid topic, I can’t stress the importance of it enough! Life is dynamic and many times things spiral out of control. By having a plan in place, you can ensure your loved ones are not burdened with having to run around for appropriate paperwork.
Here are some of the most common mistakes to avoid when it comes to estate planning:
1. Procrastination
People delay creating an estate plan because they think they have a lot of time. When you’re young, it’s not uncommon to think that way but unfortunately, death and accidents don’t discriminate when it comes to age. Your estate plan doesn’t have to be intricate, but the basics should be in place in a worst-case scenario.
2. Thinking you don’t need an estate plan
Many think they don’t need an estate plan because they’re not “rich.” The process and the documents required after death are the same for everyone. It’s always better for you to choose who the people handling your estate matters because if you don’t, the court will decide for you.
3. Choosing grandparents as guardians of minor children
After parents, grandparents seem to be the obvious choice to be guardians for minor children. They love the children and cherish the children like there’s no tomorrow! However, this is when age and health have to be taken into account. Chances of grandparents predeceasing parents are on the higher end. In instances like this, having a backup plan is a topmost priority!
4. Thinking a Will encompasses all of your assets
This is the biggest misconception people have about wills! Beneficiary designations supersede wills and will pass outside of your probate estate. This especially applies to your insurance policies and your retirement accounts. Always ensure it is up to date with your most current wishes because once you pass, changes cannot be made to this, even if your will states otherwise!
5. Thinking all you need is a Power of Attorney
Many people are unaware of the fact that a Power of Attorney is no longer valid after death. Also, a financial Power of Attorney is not the same as a medical Power of Attorney. You do need both!
It’s a lot to think about and can get overwhelming rather quickly! The key is to break it down into pieces, and the entire process becomes less daunting. Having the appropriate paperwork ready to go will provide peace of mind for both you and your loved ones. Reach out to a Certified Financial Planner or an experienced estate attorney to start the conversation today.
All written content is for information purposes only. Opinions expressed herein are solely those of Zenith, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.
