Estate planning is not a popular subject, and it is easy to understand why. Nobody wants to think about the time when they inevitably pass, but it is important to face the future so that your loved ones are adequately cared for. To this end, there are several common mistakes you should avoid that can jeopardize the effectiveness of your estate plan and ultimately create more problems than solutions.
The 2020 pandemic and social unrest in the United States has also pushed more young adults to think about estate planning. It is important to ensure that when you draft yours it is clear and specific. Avoid the following three missteps to ensure your plan is as effective as possible:
Will is outdated
Too many people begin the estate planning process and assume it is a one-time thing. On the contrary, after you have written your will, you have only begun the ongoing process of estate planning. Wills can quickly become outdated, and failing to update yours is one of the most common mistakes you can make. Whenever life circumstances change or your family grows, review your will and update it accordingly.
Incurring estate taxes
Too many people make the costly mistake of leaving assets to beneficiaries rather than taking advantage of gifting exemptions. Gifting property can trigger an exemption from estate taxes while simply including it in a will can incur hefty taxes. Planning for this is important if you plan to leave any high-value assets to your beneficiaries.
Using vague language
The entire purpose of a will is to specify your wishes as they pertain to your property. To achieve this objective, you need to use phrasing that is as specific as possible. Ambiguity is the best way to ensure that your will can be challenged and disregarded. Clearly indicating the parameters of your wishes, on the other hand, will leave little room for challenge or misinterpretation.