Estate planning is as important as having a life plan. Whether you are wealthy or just average in financial or economic standing, you have assets that you cannot take with you when you bid goodbye to this world. These assets comprise your estate.
For sure you have a lot of things to do while you have the physical capability but estate planning is probably not one of them. It sounds like you are preparing for your own death which it certainly is – because it is the act of drafting a solution for an anticipated problem.
Although it sounds morbid, it is really practical for any person who has properties to make an estate plan. The knowledge that someone you trust will do what you wish for your estate after you die does help to give you a peaceful rest. But how will you know the right from wrong? To avoid the guessing game, you should be able to identify the most common estate planning mistakes people make.
1. Assuming that only the Rich Are Entitled to Estate Plans
A lot of people have programmed their minds that estate planning is reserved only for the rich. This is far from the truth. Estate planning is for anyone who wants to make sure how their assets, death benefits and children are being managed in the event of their death.
Estate planning is not just about determining who gets your assets in the event of your demise. It also encompasses the execution of a living will and appointing a person you trust to look after or take care of your minor children. You can even arrange your own funeral with an estate plan. It is the best instruction you can leave your family with to prevent them from getting into an internal conflict over your assets
2. Thinking Simple Assets Don’t Need Formal Documents
Most people especially those who live simple lives have simple financial situations as well. Most of these individuals assume that the simplicity of their assets is enough justification for them to not consider making a last will and testament or a living will. Well, you may consider your life a simple one buy still you should protect whatever assets you have to ensure that your wishes about its distribution and management will be carried out after you die.
Taking too long to execute a will can result in not making any at all until it’s too late. The failure or neglect to create a will can result in familial stress. When you fail to execute a formal document regarding your finances and health care matters, chances are your loved ones could possibly end up in a court battle to settle the matter.
4. Not Giving Digital Assets the Attention They Deserve
About three decade ago, a person’s assets are limited only to what he or she physically owns. This is no longer the case these days because with the advent of technology, digital assets are considered property. This includes passwords for online bank accounts, digital copies of important documents, and other negotiable digital files you may own as well as your social media accounts.
Digital assets are real assets. If they have real value to you, you should include them in your estate plan.
5. Not Considering “What If” Scenarios
The future is uncertain but death is sure to come. That said, we must always be prepared. This is not pessimism. It is always good to be prepared for life’s contingencies.
6. Failure to Include Pets
Pets are personal property. You should specify who you want to take responsibility for them when you die. You may also designate a caretaker and set aside some money on a pet trust to secure your pet’s welfare after you’re gone. You should specify all these in your living or last will.
7. Not Naming a Trustee
A trustee is responsible for managing your money and possibly your family’s well-being. Your job as the owner is not just to choose anyone you can trust but someone who has the capability to do the job.
When choosing a trustee, you should specify a provision that would authorize someone to remove the trustee if he/she doesn’t perform well as expected. Before choosing one, make sure to discuss the matter with your family, especially the trustee’s duties and responsibilities.
Estate planning can be considered a defensive strategy, but doing it may be the best decision you can make before you. It works to make everything fall into place. It gives you mental peace knowing that all the things you worked so hard for are sure to get to the right people. You can execute a well-crafted estate plan with the help of an experienced professional like the estate lawyer Colorado property owners personally recommend.
Lori is a corporate consultant whose experience and area of expertise are on fund administration, debt collection, wealth management and personnel administration. He likes to share his insights about business corporate solutions, sustainability & management, and a lot of human interest stories including health, wellness and self-improvement .