Over the years, we've seen estate plans fail to do what they were intended to do. For your estate plan to remain a valuable asset for you and your heirs, you would be wise to avoid these eight common mistakes.
Decide to get my estate in order, check. Get my estate plan prepared, check. Am I done?
Not so fast.
It is not enough to decide to make an estate plan and to then create one. Those are just two steps in the estate planning process. People who do nothing more often make big mistakes that could have easily been avoided, as CNBCreported in a recent articletitled "Trust Bust: Steer clear of the 8 biggest estate-planning mistakes."
The CNBC list includes the following mistakes to avoid:
- Thinking your state will handle everything - You cannot rely on the state to deal with any assets that are not covered in your estate plan.
- Setting up a trust and forgetting about it - You need to fund your trust or having the trust does no good.
- Setting it and forgetting it - When circumstances change, your estate plan needs to be changed as well.
- Think all assets will follow your will and trust - Some assets such as retirement accounts might not follow your estate plan's distribution priorities.
- Relying on a DIY trust - You need a trust prepared by a professional, not one created by a form.
- Giving too much too soon - Gifting during your life can be good, but not if you give everything away when you might need it later.
- Not thinking of children's needs - If your children have different needs, you might want to consider giving to them differently
- Choosing the wrong trustee - It is not always a good idea to name a family member to be your trustee.
If you have questions about avoiding these mistakes, contact an experienced estate planning attorney about how you can avoid making them.
Reference: CNBC (October 22, 2014) "Trust Bust: Steer clear of the 8 biggest estate-planning mistakes"