If you’re like many residents of California, you are thinking about planning your estate. Unfortunately, many people make mistakes during the process. It’s important to know those mistakes and how you can avoid them.
Forgetting to include certain documents
A common estate planning mistake people make is forgetting to include certain legal documents. You don’t want to have just a will and nothing else. You should consider setting up a trust to hold your assets for your beneficiaries and avoid probate.
Other important documents you might want to have include powers of attorney. You can choose someone to act under a medical power of attorney who makes decisions based on your health care if you’re incapacitated. An agent appointed in a financial power of attorney can handle your financial matters such as paying your bills.
Not funding your trust
There’s no point in having a trust if you don’t add assets to it. The purpose of a trust is to hold your assets and other property so that you can pass them down in the event of your death. If you make the mistake of not funding a trust, your assets remain in your name, which means they aren’t protected when you die.
Not updating your beneficiaries
Many families go through changes. Whether you go through a divorce and remarry or close family members die, it’s important to update your beneficiaries to determine who will receive assets upon your death. Obviously, if you get a divorce and remarry, you will want your new spouse, not your ex, to be a beneficiary. If you have a new baby, you will want to add them as a beneficiary as well.
Forgetting your digital assets
These days, part of the estate planning process should involve digital assets. You may want to choose someone to manage them when you are no longer able to do so. For example, many people designate someone to manage their social media accounts after they have passed on.
Being on top of your estate planning can prevent these mistakes from happening.