Common Estate Planning Mistakes to Avoid

Multi-generational family talking

As we get older and start growing a collection of assets like real estate and financial accounts, our estate grows. As our estate grows, it’s crucial to begin building our estate plan to ensure that our assets will be passed on to our loved ones when we pass away.

Estate planning and having an estate plan for yourself is important because without it, your assets and finances may end up temporarily inaccessible to your heirs, beneficiaries and family members. This state of legal limbo may go on for years and cause unnecessary emotional duress on your loved ones after your passing – which will be emotionally taxing enough as it is!

Continue reading below for a list of common estate planning mistakes to avoid.

Not Letting Your Loved Ones Know Your Plan

If you’ve decided to leave certain assets to your loved ones, it can be important to let them know ahead of time if the asset is something they’ll need to access themselves in the event of your passing. No one wants to be left reeling, trying to figure out how to access a bank account after the death of a family member.

Not Updating Your Estate Plan When You Need To

It’s crucial to always add a new asset to your estate plan or will when you acquire it. Otherwise, it may be stuck in legal purgatory after your passing.

Additionally, laws relating to assets and inheritances may change that may mean your 20-year-old plan needs to be updated. Experts suggest revisiting your plan every three years.[1]

Not Having Contingent Beneficiaries

It’s smart to have contingent beneficiaries that will gain access to your asset(s) in case your primary beneficiary is unable to accept them for any reason. If there is no contingent beneficiary available, and all your primary beneficiaries have passed away, your asset(s) will go back to the estate and end up in probate – which can be lengthy and expensive. Following probate, if your asset still hasn’t found a home, the courts will step in.[2]

Not Having One at All

Finally, if you own assets of any kind that you want your loved ones to inherit one day, the biggest mistake you can make is not having one! Plan for the future of those who matter to you.

The use of trusts involve a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning progressional before implementing such strategies.

The opinions contained in this material are those of the author and not a recommendation or solicitation to buy or sell investment products. This information is from sources believed to be reputable, but Cetera Advisor Networks LLC cannot guarantee or represent that it is accurate or complete. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.

[1] Amend, Patricia. “8 Common Estate Planning Mistakes.” AARP, 20 Jan. 2023. Accessed 20 May 2024.

[2] Hicks, Patrick. “Everything You Should Know about Contingent Beneficiaries.” Trust&Will, n.d. Accessed 20 May 2024.

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