Michigan residents sometimes make mistakes during estate planning. It’s important to approach planning your estate with care and diligence. Below are five common mistakes that occur.
Breakdown in communication
You might tell your heirs how you plan to handle planning your estate. But if you fail to put your plan into action, that’s going to cause legal problems and hurt feelings. You might want to include a note if you change your mind about anything you’ve said. This will at least let your heirs know your reasoning behind certain decisions.
Forgetting to update beneficiaries
Beneficiaries are the people who will receive your assets. After choosing your beneficiaries, something could happen to change things. Divorce, death, marriage and birth can all affect your choice of beneficiary. Failing to update beneficiaries is an easy estate planning mistake to avoid.
It’s wise to update your beneficiaries based on life events. You might update several legal documents, including your life insurance and retirement accounts.
Failing to leave a letter of instruction
Those you leave behind need to know where to find important documents. Without you to tell them where to look, it’s like a scavenger hunt with no directions. Organize your records so everything is easy to find. Include a letter of instruction with your estate plan. This saves your heirs the trouble of finding paperwork tracking down assets.
Forgetting to include important legal documents
It’s important to include the necessary documents with your estate plan. Without the proper documents, your estate could land in probate court. The probate process is a long and expensive proceeding that you want to avoid.
Failing to create an estate plan
Avoid the mistake of failing to create any type of estate plan. Your estate plan allows you to choose who inherits your belongings and assets. It’s a way to provide for your loved ones after you’re gone. A solid estate plan can reduce family tensions and legal problems.