Estate planning is an important part of an individual's long-term goals for both personal and professional assets. Financial and legal experts too often see common mistakes in handling a person's or couple's affairs, leading to complicated probate and potentially litigious battles.
It's important to prioritize your long-term plans through careful, comprehensive estate planning. Take note from past issues and work to avoid common mistakes with a few helpful tips.
First things first, create a plan
The biggest mistake a person can make in the realm of estate planning is to have no plan at all. Too often people put off working on an estate plan due to misunderstanding the purpose and importance of planning for this long-term future. Young people often believe they haven't acquired enough assets or experienced major life milestones and think these are reasons to not have an estate plan.
In reality, even single persons in their 20s and 30s can benefit from beginning the estate planning process. Your personal circumstances can change in a moment, so it's worth having an initial plan in place before accruing larger assets or experiencing major life changes such as getting married and having kids.
Diversify your estate planning documents
An important step in estate planning in creating and maintaining a will, but that's by no means the only important documentation to consider. Over time, diversify your estate plan to include additional documents such as an advanced medical directive and power of attorney.
It's important to not put off creating these additional long-term plans. Another common mistake is waiting until it may be too late to address these additional aspects of an estate plan. Don't wait until your health is in serious jeopardy to consider a plan for your care and wellbeing.
Revisit a plan over time
Estate plans are only as good as the information they hold. If this information is out-of-date, the probate process can stagnate and end up in prolonged litigation. Once you've devised an estate plan with financial and legal experts, continue to revisit the plan and ensure it's relevant to your current circumstances.
Beneficiaries may change, property is bought and sold, loved ones become unavailable and other issues arise that may affect your existing estate plan. Monitor your plan and revisit important documents every one to two years to ensure they remain relevant.
The most important thing you can do to prepare for the future is to utilize the resources available to you. Consult with legal experts, business partners and financial planners to work on an effective, comprehensive estate plan. Preparing for the future has to start sometime, so don't put off planning ahead.