A solid, legally binding estate plan ensures your family honors your final wishes after you’re gone. It also prevents your family from experiencing conflict if there are questions about what to do with your assets.
According to U.S. News & World Report, it is equally important to avoid common estate planning mistakes. Here are a few issues that can get in the way of proper estate planning.
Not updating your plan
Your estate plan should change as your life progresses. New marriages, divorce, the birth of a new child, or even moving to a new state requires a review of your current plan. Additionally, you should also review your plan every three years or so regardless of life changes, just to make sure it still meets your needs.
Choosing the wrong executor
Your executor must pay debt and taxes, locate assets, and disperse assets to heirs. The job is extremely intensive and requires a responsible, fiscally-aware person to carry out. Your executor must also recognize when to secure outside assistance, such as speaking with an accountant when dealing with complex tax issues.
Poor record keeping
Things like property titles, tax records, information on debts, bank statements, and many other types of information are a must during the estate planning process. Make sure these records are well organized and easily accessible by family members and your executor. If you have updated documents, make sure they replaced outdated versions to prevent confusion. The better your records, the easier the process.
Finally, if there are concerns about how your heirs will react to decisions in your estate plan, address them directly. Explaining your reasoning can prevent an heir from contesting your will, which will drag out the administration process unnecessarily.