What’s the biggest mistake people make when dealing with their estate plans?
Not having a plan at all.
It doesn’t matter if you are young or old, comfortably well-off or living paycheck to paycheck, everyone has a few things that they should address:
1. Get a disability insurance policy. Even if you are just starting your career, the cost of disability insurance is worth it. While you may have some serious confidence in your genetics to keep you nice and healthy for a while, there’s no telling when a car accident might happen or you could get injured helping a friend move. A disability insurance policy can keep you from losing everything.
2. Decide who you want to handle your estate if you die. Even if you don’t have any insurance, you probably have personal items that matter a great deal to your loved ones. If you don’t give someone the legal right to sort through those items and distribute them to the people you love, your landlord could literally throw every important keepsake you have out on the curb. Having a named executor also gives your family the right to access your bank account, handle your social media accounts and avoid going to court to get even the smallest things done.
3. If you have life insurance, get a trust. Otherwise, that money is open to taxation — and your family may need it just to survive. You probably don’t have enough insurance to cover the loss of your income and pay hefty tax fees as well — so if you want your insurance to do what it is intended, make sure that it goes into a trust that will protect your loved ones.
4. Get your basic end-of-life documents drawn up, including a power of medical attorney and a living will. These days, you’ll be asked for one at every hospital admission and even at many doctor’s offices. Unless you want a committee of strangers — whichever doctors happen to be working the night that you end up in the hospital unconscious or incapacitated in some way — making your medical decisions, you need that paperwork.
Get an attorney and stop avoiding basic estate planning — you’re putting not only your own body at risk but potentially leaving a lot of painful issues for your loved ones to sort out.
Source: FindLaw, “Ten Common Estate Planning Mistakes to Avoid,” accessed June 23, 2017