Estate planning is one of the most effective ways to ensure that your loved ones in Indiana are taken care of after you’re gone. However, it’s also easy to make mistakes when doing this planning and cause more harm than good.
Not having an updated will
Firstly, not having a will is one way to ensure that your assets get distributed according to your state’s intestacy laws. This means that your loved ones may not end up with what you wanted them to have, and it could cause disagreements and conflict among them.
Secondly, having a will isn’t enough – it’s important to keep it updated as your life changes. For instance, you might need to update it if you get married, have children or acquire more assets. If you don’t keep your will up-to-date, it could get challenged in court and things may not go the way you wanted.
Not having a trust
A trust is an estate planning document that you can create to manage your assets and provide for your loved ones after you die. It can also be used to protect your assets from creditors, lawsuits and estate taxes. If you don’t have a trust, your assets will be subject to probate – a legal process that’s meant to distribute your assets according to your will.
Probate can be time-consuming and expensive, so if you want to avoid it, you need to have a trust. Moreover, trusts can provide more flexibility than wills when it comes to distributing your assets. For example, you can set up a trust that pays out over time.
Not selecting updating your beneficiary designations
Your beneficiary designation is a form that you fill out for certain accounts, such as your life insurance policy, retirement account and bank accounts. This form indicates who will receive the money in these accounts if you die. It’s important to keep your beneficiary designations up-to-date because they take precedence over what’s written in your will.
It’s good that you’re thinking about estate planning. However, as you can see, there are many ways to mess it up that you should be aware of if you want to avoid problems for your loved ones down the road.