Relying Solely on a Will
The importance of a will is not to be underestimated, but when it comes to estate planning, this is just one of many important factors. A complete estate plan encompasses additional components, including financial power of attorney, advanced medical directive, and asset protection. If you have a family business, business succession planning is also essential. Establishing concrete, legally binding plans for your medical care and assets is imperative when it comes to estate planning.
Failing to name a contingent beneficiary on life insurance policies and retirement accounts is a very common and serious mistake. The default if no contingent is indicated is likely your estate, which may be subject to probate and creditors. Another common error is forgetting to change an ex-spouse on a policy or IRA. This situation can be a catastrophe for your current spouse and family. It is important to regularly review your beneficiaries and update them when necessary.
Putting Off Your Planning
Many people think they are “too young” or have “plenty of time” to handle their will and estate planning. These are common misconceptions that can have tremendous negative ramifications. Estate planning is not something you only need to worry about when you are older. Simply being young and healthy is not a reason to avoid planning for the future and protecting your family. Unfortunate and sudden accidents and illnesses happen all the time. Your family will rely on your proper estate planning if the worst does occur.