An estate plan allows you to designate who inherits your assets when you pass away and who will make decisions for you if you become incapacitated. However, it’s also how you can ensure things are handled based on your wishes.
Unfortunately, there are some mistakes people make when creating an estate plan. The do’s and don’ts of estate planning found here can help you avoid those mistakes.
1. Do create a will
Your will provides information on how you want to distribute your real property and personal assets after you die. If you don’t have a will, the court will likely determine how your assets are distributed, which may not be what you want. For larger or complex assets, adding a living trust to your estate plan is advisable since this will provide asset distribution and avoid probate.
2. Don’t wait to create an estate plan
Some people (particularly younger people) don’t think that creating an estate plan is something they need to do now. However, unexpected situations arise all the time. You need to create a plan while you can still make decisions yourself.
3. Do designate your powers of attorney
Powers of attorney (POA) allow you to specify who will make decisions for you if you can’t. You can name someone to make financial and healthcare-related decisions for you with this document.
4. Don’t forget to update your estate plan throughout your life
If you experience any significant change in your life, you should update the estate plan to reflect this. You should also review the documents regularly to ensure everything is current and accurate.
Creating an estate plan
Creating an estate plan now is the smart and responsible thing to do. It will help your loved ones know what you want after you pass or if you become incapacitated.