Estate planning is a smart move by anyone who wants to protect their assets and make sure their assets are used properly to help their family's future. No matter what types of assets you have, it is important to get involved in estate planning to ensure your family's future. If you are getting involved in estate planning for the first time, then there are some common mistakes you could wind up making. Before you visit with your estate planner, you should make sure that you have done your homework and are as ready as you can be.
When people start preparing for estate planning, they usually think of the big assets such as their home, jewelry, or car. It is very common for people to forget about the summer cottage they own, their investment portfolio, and other assets that are less common. Be sure that you sit down and list out all of your assets before you go to your estate planning meeting and be sure your list includes everything you own that is of value.
The creation of a will requires a lot of information, including the names of those who you want to have your assets when you pass away. But what would happen if, just before you passed away, one of your beneficiaries passed away as well? It is always a good idea to have at least two beneficiaries for each item, or three beneficiaries if you want to be absolutely sure your assets will go to the right person.
You decide to leave a portion of your assets to your local church, but you want your church to start a soup kitchen with those assets. If you do not explain specifically what you want done, then there is a very good chance it won't happen. Be sure to discuss any potential special distribution instructions you have with your estate planner to make sure all of your instructions are in place.
The probate court in your state will not start distributing your assets to beneficiaries until your estate expenses have been paid. If you know you will have a lot of expenses such as tax payments and credit card debt, then you need to plan for that if you want your beneficiaries to get your assets. A good way to handle estate expenses is to get a life insurance policy made out to your estate and have your estate use those funds for final expenses. This will prevent any of your assets from being used for anything other than your final distribution instructions.
Your life changes from year to year, and your estate must be regularly updated to reflect those changes. Too many people think that once their estate is set up, then they are all done. The truth is that you should schedule an estate planning update meeting at least once a year to alter your estate appropriately.
Getting estate planning done is a necessary part of a person's financial and legal life. Before you head out to your first estate planning appointment, you should make sure that you have all of the materials you need and are prepared to completely answer all of your planner's questions.