For most residents of Connecticut, the primary goal of creating an estate plan is to maximize their wealth and leave as much of it as possible behind for their loved ones. The estate planning process, however, can prove tremendously complex in some circumstances. Many people make similar mistakes that end up costing them considerably in the long run.
So, what are some of today’s most common estate planning errors, and how can you avoid making them yourself?
Avoid these common estate planning mistakes
According to Forbes, one of the most common mistakes made in estate planning is a failure to update beneficiary designations in a timely manner. For example, maybe you initially listed your spouse as the beneficiary for your retirement accounts, life insurance policies and so on, but you later divorced. Chances are, you probably do not want your former spouse to continue to be your beneficiary, but you need to make formal changes to your estate plan to exclude him or her.
Another common error many people make when crafting their estate plans involves failing to give someone power of attorney. Generally, you want to have two different powers of attorney in place, with one covering medical matters, and the other, your financial affairs.
If you have any revocable trusts in place, these, too, may warrant some attention, as failing to fund revocable trusts is another common estate planning problem. For assets to enter a trust, you need to formally title them in the name of the trust, and this holds true with regard to real estate, financial accounts and so on. Skipping this critical step will typically keep you from reaping the benefits generated by creating the trust in the first place.
Ultimately, one of the best things you can do to help avoid making these and other common estate planning errors is to review your estate plan regularly to ensure it still meets your needs.