Creating an estate plan is a responsible step to take as you age. However, to ensure that your estate plan remains legally binding and represents your wishes, you must ensure you aren’t making some of the most common mistakes.
Knowing what the mistakes are is the best way to avoid them. Keep reading to learn more.
1. Never updating your plan
Estate planning isn’t a “set-it-and-forget-it” process. You must update them after any major life event when public policy changes or when your life goals shift.
One example is if you move to a different state. You need to review your estate plan to ensure they meet the requirements of the new state where you are living. The same applies to having a child, getting divorced or getting remarried.
2. Failing to plan for long-term care
It’s estimated that around 70% of people aged 65 will require long-term care before the end of their life. If you need to move to a nursing home and want a private room, the cost will be $100,000 or more per year. To stay in your home, with home health services, you should budget $50,000 per year. If you fail to plan for long-term care now, you may not have the funds needed for the care required when you reach this age.
3. Not planning for your estate’s tax liability
Estate tax liability may seem like a rich person’s problem. While this may be true on the federal level, not at the state level. You need to make sure you plan for the taxes your estate will owe when you pass to ensure your beneficiaries don’t experience hardship.
Avoiding mistakes with your estate plan
While making an estate plan is a smart move, you must avoid the mistakes listed here. This is the only way to feel confident that your wishes will be met after you pass. Knowing the legal options and requirements for estate planning will help you with this.