Creating your end of life plans can be an intimidating and complicated process. While one of the most common mistakes regarding estate planning is not having a plan to begin with, the next biggest mistakes include not updating said plan or failing to let your heirs know what to expect.
When an estate plan doesn’t effectively do its job, it can, unfortunately, lead to heated family conflicts or even litigation over your assets after you’re gone. To ensure everything goes to plan after your demise, here are four ways to ensure your estate plan is successful:
1. Let your heirs know what to expect
According to one survey, 40% of parents never discuss their intentions for their estate with their children. It’s always a good idea to share your end of life plans with your heirs to avoid any surprises or familial strife when your time comes. You don’t have to disclose every detail, but you should let your heirs know the overall value of your estate, the assets and liabilities in it and how you plan to distribute your wealth and belongings. This will also give your loved ones to express their views while you are still around.
2. Keep your estate plan up to date as needed
Unfortunately, estate planning isn’t something you can just sit down and complete once then completely forget about it. If your plan isn’t up to date, it can sometimes be worse than having no estate plan. Changes to state laws or significant life milestones such as marriage, divorce, childbirth or death may all create a need to review and revise your plan with your estate planning attorney. You should plan on reviewing your documents every few years to ensure your assets go to the right people.
3. Prepare your heirs for their inheritance
If you plan to leave a significant portion of your estate to your heirs, it’s essential to consider whether they are emotionally or mentally prepared to handle their new wealth. Too often, wealth can disappear due to poor spending habits, bad investments or other causes because your heir doesn’t have knowledge or skill to handle the money and property they inherit. Consider teaching your heirs the value of money while you still can or have them meet with a financial advisor.
4. Don’t forget your power of attorney
A power of attorney and advance medical directive are legal documents in which you an agent to act on your behalf to manage your finances or healthcare affairs if you can no longer do so yourself while you’re alive. Unfortunately, these documents are useless if no one knows you possess them. If you have these documents in your estate portfolio, be sure your agents know where to find them should you need it.
A well-crafted estate plan will protect your assets and legacy while giving your loved one’s peace of mind after you pass on. By following these tips, you can ensure everything goes according to your plans even when you’re gone.