Estate planning is an important process every adult needs to perform. It allows people to ensure the carrying out of their final wishes and protect their loved ones’ inheritances.
It also involves more than simply writing out a will on a piece of paper. There are many things individuals need to do to create a proper estate plan, but there are also actions they need to avoid.
1. Failing to heed the urgency of creating an estate plan
It seems like common sense to create an estate plan as soon as possible. However, according to Gallup, less than 50% of the nation’s population have a will detailing their wishes regarding the handling of their finances and estate after they pass. While the idea that a long life with plenty of time to draft a will awaits an individual is an appealing one, it is not one that always matches reality. Leaving the world without a will leaves spouses and minor children or other heirs vulnerable.
2. Failing to provide a buffer for minor children
Those with minor children may believe it is okay to simply leave assets to them. However, if the children inherit a large amount of money or property when underage, if there is no appointed guardian, the court assigns one. The inheritors then suddenly find themselves in charge of this money or property when they turn 18, when they may not be mature enough to handle it. Appointing a trusted guardian and putting trusts in place can help with these potential problems.
3. Failing to account for deceased beneficiaries
Sometimes beneficiaries die prematurely. It is important to specify who is next in line in case the first in line to inherit passes.
Estate planning requires careful consideration. By avoiding certain things, individuals help make the future more secure for their heirs.