No matter who you are and what you do for a living, planning your estate is one of the most important things you can do in life. Although more and more people are starting to realise this, there are still some that are making key mistakes. For this reason, we have made a list of the most common mistakes for you to avoid.
Not Planning At All – Before we dig any deeper, we should point out that the biggest mistake of all is not having any plans in place. No matter how much we like to avoid the topic, we are all going to die and having no plans means that your possessions and estate may not go to your desired recipients. Not only that, they could face losing a significant portion through tax and other costs.
Leaving the Will Unattended – Drawing up a will is the first step and one that is often left too late, but it also has to be updated regularly. Throughout life, people will come and go and the value of your assets will change. With this in mind, you need to regularly review your will and ensure that everything is in place.
Choosing a Poor Executor – When married, the immediate decision is to choose the partner as an executor but this doesn’t have to be the case. If you think that they wouldn’t be suited to the role or are too emotionally involved, you don’t have to choose your partner to be the executor for your estate. In fact, it is a much wiser decision to choose someone who has less involvement in the process and can look at the situation with an objective view.
Not Meeting a Professional – Nowadays, it is becoming easier to draw up all the relevant estate planning documents at home and online. However, this doesn’t mean that you shouldn’t consult a professional. When creating our own documents, we are rolling the dice with our future because vital details can be missed out. By consulting a finance professional, you can ensure that all the documents are legal and drawn up correctly should the worst happen.
Trusting People – In the past, many loved ones have been left disappointed because the deceased was simply too trusting with other beneficiaries. If you want to leave something for a loved one, make sure you include them as a beneficiary because the people you trust may not ‘do the right thing’.
Adding a Child’s Name to the Deed – Although this seems like a good, safe idea, you could actually be setting your child up for a life of financial headaches and numerous tax costs. If you want to give your child the house, it might be safer to do so via an inheritance.
There we have it, six common mistakes that people make when planning their estate. As long as you remember to avoid these, you should be in a good position moving forward!