Your estate plan offers great peace of mind to you as well as your loved ones. With a solid plan in place, you can rest assured that your family will receive assets as you intend. Additionally, your family will not have to deal with complex legal issues after you are gone.
However, common estate planning errors can create complications and prevent your loved ones from receiving assets. Here are a few of those issues and how you can avoid them.
Forgetting to name a backup executor
Executors must carry out many essential duties after you die, from locating assets to notifying creditors to dispensing money and property to heirs. If you choose your spouse to serve as the executor, you must also specify a backup selection. In the event the unthinkable happens and your spouse is not available to take on important will duties, the court will disperse assets according to state laws.
Not planning for incapacity
In the event you are incapable of making decisions for yourself due to serious illness and injury, a power of attorney gives authority to the person you select. This person can make medical and financial decisions on your behalf, including specifying the type of care you prefer and selling property to pay creditors. Making these decisions now ensures you have help when you need it most.
Making mistakes with beneficiary designations
Financial accounts come with beneficiary designation forms, which allow you to identify heirs you wish to receive these assets. In addition to including the names of heirs on the beneficiary designation forms, you must also include the percentage of assets you wish each heir to receive. If you fail to include this information, the financial company overseeing the account will decide for you, even if you include information in your will.
