By the time you reach retirement age, you may have accumulated a 401(k), IRA and other investment accounts, along with insurance policies and physical properties. You’ll use some of these assets to support your retirement, but the rest may end up in your estate — which is why an estate plan is so important.
So, to leave a legacy for your family and those philanthropic groups you support, you need a comprehensive estate plan — and you need to avoid making mistakes. Here are some of the most common ones: Procrastinating – Estate planning, and its implications about our mortality, may not be a pleasant topic to think about. Yet, putting off your estate plans can be risky. If you were to pass away or become incapacitated without doing any estate planning, the results could be costly for your loved ones. One possible consequence: If you haven’t at least created a basic, simple will, the courts could decide how to divide and distribute your assets, and they may do so in a way you wouldn’t want.
Not updating wills and other documents – Drafting a will and other legal documents, such as a living trust, is an important step in your estate planning. But you shouldn’t just create these arrangements and forget about them. Changes in your life and among your loved ones — deaths, divorce, remarriage, new children and more — may result in the need for you to update your estate plans, so it’s a good idea to review them periodically.
