An estate plan is a written, legally-enforceable set of instructions that tell your loved ones how to handle your assets when you die. It can also address other issues, such as who will handle your affairs if you become incapacitated.
If you’re preparing to create your estate plan, it’s critical that you avoid making the following six errors because each of them can lead to considerable trouble for your loved ones, your legacy and/or your health.
Not having a will
Not having a will means that your assets will be given to an heir based on Ohio law. Without a will, your wishes aren’t taken into consideration at all. This may lead to legal battles for your family members.
Failing to update your estate plan
Major changes in your life, such as changes in your family structure, can mean you need to change your estate plan. This is often the case if you get married, have children or go through a divorce. You also need to update the plan if a beneficiary or anyone named in your estate plan passes away.
Not planning for incapacity
Planning for incapacity gives you a say in who handles your affairs if you can’t make decisions on your own. You can set up powers of attorney designations for your finances and healthcare so there’s someone to make those decisions for you.
Failing to name beneficiaries
Certain assets, such as financial accounts and life insurance policies, can be passed to beneficiaries without having to go through your estate plan. For example, you can fill out a payable-on-death designation for your checking and savings accounts. This allows you to say who gets those accounts when you die.
Ignoring digital assets
Digital assets, such as photo storage, multimedia accounts and social media accounts, can be passed to the beneficiaries you choose. Including them in your estate plan provides clear directions for who should manage which ones
Not considering long-term care
Many people fail to plan for the possibility of needing long-term care, which can be extremely costly. Without a plan, the costs of long-term care can quickly deplete your estate, leaving little for your loved ones.
Taking the time to set up your estate plan can give you peace of mind. Because the laws surrounding some components are complex, it may behoove you to work with a legal representative who can assist you with getting everything together.