Estate planning can provide peace of mind, ensuring that your interests, loved ones and assets will be protected while you are no longer around. Unfortunately, estate planning can also be a fertile ground for some very costly mistakes. Making sure you are aware of the common Pennsylvania estate planning mistakes means you will be more likely to avoid them.
Here are three costly estate planning mistakes you need to guard against:
Failing to keep your will up to date
A will does a lot more than simply saying who gets what when you die. In your will, you can name guardians and set up trusts to protect young, incapacitated or disabled heirs from losing their share of the inheritance. A clearly written will can also prevent or resolve unpleasant inheritance disputes. This is why it is important that you update your will to reflect the changes in your circumstances and comply with existing laws.
Failing to update beneficiary designations
This is yet another estate planning mistake. Most people update their wills but fail to update the beneficiaries for their life insurance policies, retirement accounts, savings bonds and annuities. This can be a very costly oversight. Remember, beneficiary designations supersede anything you may have indicated in the will. For instance, if you revise your will following a divorce but fail to update your IRA beneficiary, your ex-spouse will have the legal right to claim those assets when you die.
Failing to include long-term care in your plan
Alongside protecting your family and assets, it is also important that you include your long-term care in the estate plan. Unfortunately, most people overlook this. You need to prepare for the cost of your future care by investing in a long-term care and disability policy. And the sooner you do this, the better because these policies tend to be more expensive as you advance in age.
Done right, estate planning can give you control over what happens to your assets when you are no longer around to make crucial decisions. Knowing the mistakes to avoid when planning your estate can save your heirs from stress and preserve your legacy.