People often make estate planning mistakes, especially when they try to do the whole thing on their own or they just put it off for too long and rush through it. These mistakes can make things a lot harder for their family and their heirs.
If you’re creating your estate plan, you may want to consider trying to learn from these mistakes. If you can identify what other people have done wrong, you can sometimes find solutions to get around that yourself. Let’s take a look at a few examples.
Not creating an estate plan
Certainly, the biggest mistake that people make is not drafting their plan at all. Most Americans don’t have one. This can lead to estate disputes, confusion, arguments between heirs and a lot of other issues. It can also just mean that the estate has to pay more in taxes then it would have otherwise or go through a lengthy and costly probate process. It’s certainly better to have a plan in place, regardless of your assets.
Not addressing family heirlooms
It’s also important to remember that your estate plan has to do more than just divide money or real estate and other major assets. You may also have to address smaller assets that are family heirlooms. In a lot of cases, disputes arise because siblings argue over the ownership of sentimental items that have no actual value. You may overlook these, considering that they don’t have any monetary value, but they can be very important to your heirs.
Not providing adequate instructions
In a lot of cases, people just watch other estate planning catastrophes unfold. Maybe the heirs don’t have enough instructions on what they’re supposed to do with different assets and it leads to months or even years in court trying to sort it all out. Perhaps they get into arguments that create rifts that last for the rest of their life.
Seeing someone else’s family go through this can give you some incentive to create a plan to prevent the same thing from happening to your own family. Just make sure you know exactly what legal steps you’ll need to take.