No one knows what the future holds. By investing the time to establish an estate plan, you are better protecting yourself and your loved ones against tomorrow's uncertainty.
For an estate plan to effectively convey someone's wishes, there are certain steps that individuals need to take. When people commit these errors, their estate plan may fail to accomplish all of your goals.
1: Forgetting key elements
When thinking of an estate plan, a will likely comes immediately to mind. Wills are important, but they often are not enough to constitute a comprehensive estate plan. Depending on your unique situation and your specific wishes, you may want a power of attorney or other important documents.
2: Failing to regularly update it
Recent data from Wells Fargo suggests that for people ages 60 and older, one in six estate plans are out of date. Your estate plan is something you should review every three to five years to ensure it still accurately reflects your wishes. You should also consider updating after major life moments, including the birth of a grandchild, a child's marriage or a death in your family.
3: Keeping it a secret
If you are taking the time to create a comprehensive estate plan, it means that you have specific wishes for how to distribute your assets and what end-of-life decisions you want made. Many people are hesitant to discuss the details of their estate plan with their loved ones. Conversations about your passing can seem macabre, and you may view your finances to be an inherently private topic.
As uncomfortable as it may be, it is important to talk about the details of your estate plan with your loved ones. By proactively having this conversation, you can address any questions, alleviate any concerns and better ensure the most important people in your life are all on the same page.