Studies consistently show that most Americans do not have an estate plan. You may not think you need one because you do not own much property, or you may not like to think about the end of your life.
Nevertheless, failure to create an estate plan could cause your family problems after you are gone. Mistakes in your estate plan can also cause difficulties because you are no longer there to clarify your intentions. U.S. News and World Report describe some of the most serious mistakes people make with estate planning.
1. Choosing an inexperienced executor
The executor of your will is the person who is in charge of your estate after your death. He or she pays off any outstanding debts, files your final income tax return and distributes your remaining property according to the directions you set out in your will. Obviously, this person should be trustworthy and dedicated, but he or she should also have an understanding of financial matters.
2. Not communicating with your heirs
It is not pleasant for family members to receive surprises in your will. If their inheritance is not what they expected, they can become upset and angry. This may result in arguments between family members or a legal challenge to the will that delays the process and inconveniences everyone. Better to talk about the contents of your estate plan with your heirs beforehand so that they have an idea of what will happen when the time comes.
3. Keeping bad records
In your will, you probably refer to various financial records. These records should be accurate and up-to-date so the relationship between them and your estate plan is easy to understand.
If you do make a mistake in your estate plan, it is possible to make corrections to most of the documents. You should review the estate plan often to ensure accuracy.