Estate planning errors can be anything from having an outdated or incomplete plan to not having one at all. Protecting assets is a fluid process, as regulations and rules change yearly. Therefore, a plan from 2012 may not be the best choice this year. Read on to look at several mistakes to avoid when planning an estate.
Not Having A Plan
The most serious error a person can commit with an estate plan is to not have one. Regardless of a person’s worth, creating an estate plan is an important step in protecting their financial future and assets. To start planning, a client needs a living will, a will, a living trust and powers of attorney.
Having An Outdated Estate Plan
Just because a person has an estate plan does not mean the process is over. Regulations change every year, and estate plans should be reviewed every five years or so. Irrespective of changes in the law, a person’s life can change substantially over that length of time. One of the worst things a person can do is to not update their estate plan as their life circumstances change.
Outdated Beneficiary Designations
Many clients overlook the designation of beneficiaries when creating an estate plan because trusts and wills do not handle insurance policy proceeds and retirement plans. However, failing to update beneficiary designations on these items after a change in circumstances will delay disbursement. If a person marries, divorces or loses a spouse, they should change the beneficiary designation on all retirement and insurance plans to reflect their changed circumstances.
Not Considering Long-Term Care
Most people fail to consider planning for long-term medical care. It can be expensive to stay in a nursing home, and such a stay can quickly erode a client’s life savings. Ignoring this part of estate planning can be a significant mistake. When sitting down to create an estate plan, a client should talk to their Estate Planning Attorney about taking steps to pay for long-term medical care while protecting assets. You can also follow them on Twitter for more information.