All California adults can benefit from having an estate plan. However, it’s natural for anyone starting out to make certain mistakes that can and should be avoided..
Not including a contingent beneficiary
Most people have one person in mind to name as a beneficiary to their financial accounts such as life insurance and retirement. However, it’s a mistake to only name a single individual to inherit the funds from those accounts; if they die before you, it means you don’t have anyone to leave them to. Naming a contingent or secondary beneficiary is wise and ensures someone receives the assets if your first choice passes away early.
Failing to update your plan
Prudent estate planning requires you to periodically update your documents. Whenever a major life change occurs such as marriage, divorce, birth, adoption or death, you’ll have to revisit your estate plan and make the relevant changes. Some people fail to take this crucial step, which can cost them later.
Not including healthcare plans
Some people don’t realize that healthcare plans are a big aspect of estate planning. One of the biggest mistakes is failing to include advance healthcare directives or a medical power of attorney and choosing an agent to ensure your wishes are upheld. If you are incapacitated in the future and cannot voice what you want in terms of medical care, it burdens your loved ones.
Only having a will
While it’s wise to have a last will and testament, only having that and nothing else in your estate plan is a mistake. This document only allows you to name beneficiaries and guardians for minor children and pets and how your final arrangements should be handled. Estate planning entails many more legal documents that go beyond what a will can achieve.
Estate planning isn’t a comfortable topic, but it’s necessary. Ensuring you do it right can ease your mind.