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5 mistakes you want to avoid with your estate plan

On Behalf of | Sep 12, 2021 | Estate Planning

One of the most serious estate planning mistakes people make is failing to make any plan at all. This often leaves families to go through the bewildering probate process without the guide of a will or other documents that outline the wishes of the deceased. It may also leave family members struggling to make decisions about a loved one who falls ill without a power or attorney or medical directive in place. 

If you have an estate plan, you can justifiably feel proud of yourself for taking this step to spare you loved ones the stress of intestacy. However, many in your position feel the same confidence that they have done a good thing and never realize the confusion and frustration they created with their plan. That is because they made critical errors somewhere along the line. Estate planning blunders can cost your loved ones financially and emotionally. 

Preserving your legacy 

An estate plan is a living document, not one you can lock in a safety deposit box and forget about. It does not have to be complicated, but it must be updated as your life changes. You will want to regularly review the agents, beneficiaries and assets you name in your will, as well as your revocable trusts and powers of attorney, to ensure they are current and relevant. Additionally, your estate plan may cause trouble after your passing if you do the following: 

  • Fail to name appropriate beneficiaries for investments, retirement funds and other accounts, which typically supersede any designation in a will 
  • Name a minor child as a beneficiary instead of establishing a trust, which often results in the court appointing a guardian to manage the inheritance until the child turns 18 
  • Create a trust but never funding any assets to it 
  • Leave instructions for your trust that contradict your will 
  • Neglect to convert your traditional IRAs or 401(k)s to Roth products to spare your loved ones costly tax burdens 

In Texas and across the U.S. within the next quarter century, more than $68 trillion will pass from one generation to the next. If your wealth is among that figure, you will want to be certain you have taken every possible step to protect your estate and your heirs. The more complex your assets or your family situation, the more complicated your estate plan may be. However, even a simple plan requires being proactive to avoid the common missteps that can jeopardize your goals. 

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