You probably already know how important it is to have a solid estate plan in place in case the unthinkable happens. An estate plan safeguards your assets, but it also makes life easier for your family after you are gone.
Along with initially implementing a plan, you must also make sure that you avoid common errors in estate planning. Here are a few ways to establish a legally-binding, valid plan.
Do not create your own estate plan
People with fewer assets might think the best approach is to use an online tool to create wills and other estate planning documents. Keep in mind there are lots of factors that determine whether a plan is valid, and you might not have an awareness of all relevant factors. Additionally, laws from state to state dictate specific estate planning rules. Getting professional assistance ensures proper will creation.
Choose backup executors
The executor of your estate plan is the person who must carry out the terms, including distributing assets to heirs. Because of the responsibility involved, choosing the right person is key to protecting your estate. However, you should also consider some backup executors in case your original selection cannot perform their duties. If your original selection is unavailable or no longer interested, the court will select on your behalf.
Update beneficiary designations
Retirement accounts and life insurance policies have beneficiary designations, which indicate who you want to receive the proceeds after you are gone. This information supersedes anything contained within wills and other estate planning documents, so you must make sure it is accurate. Failure to do so could result in your assets going to the wrong heir.
You should also conduct a full review of your total estate plan once every three years. Additionally, conduct a review after major life changes, such as new marriages or the birth of a new child.
