Imagine working a lifetime to build your wealth. You spend countless hours working the Bay Area in order to create a strong stock portfolio, buy a house and accumulate various other assets. But, what happens to your wealth if something should happen to you or if you pass away? Have you taken the appropriate steps to protect your property and your heirs?
Estate planning consists of various tools that protect the legacy for your children or other beneficiaries. In order to ensure your property passes to your heirs, there are some estate planning mistakes you need to avoid.
Depending on the state
While each state, including California, has estate laws, you should not depend on the court to properly distribute your property to your beneficiaries. In order to avoid the probate process and the long delay that usually goes with it, consider putting at least the bulk of your property in a revocable trust.
Not updating the plan
As you go through life, things will change. You might gain more property, have more children or experience other major changes. Every time this happens, you should update your estate plan. The estate plan you created at the age of 30 probably does not accurately reflect your situation or how you want your trustee to manage your estate at the age of 50. Once you create an initial estate plan, revisit it periodically so that it reflects your wishes.
Selecting the wrong trustee
The role of trustee or executor is very important and comes with some serious responsibilities. While you might feel like a close relative is your best choice, be sure the person you choose has the capabilities and time to take on the role. Also, be sure you select a secondary trustee in case your first choice cannot performs the duties.
In order to ensure that your legacy passes to your heirs, you should put together an estate plan as soon as possible. When you do so, avoid the above mistakes so that you can feel confident about having a strong and effective estate plan.