It comes as no surprise to learn that most Britons are not adequately prepared for life after death. Or rather, are not prepared for life carrying on for their friends and family after they have passed. We take a look at the most common estate planning mistakes and what you can do to correct or prevent making them.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
Great financial planning will not only cover your monetary needs for the present and future, but if you incorporate estate planning, it will also cover the beyond.
“When I talk to doctors and dentists, I find that many haven’t built the foundations for estate planning. They haven’t assigned power of attorney, created wills, drawn up guardianship documents, updated their beneficiaries, or even properly funded a trust.” Darren Scott-Guinness
Here’s 4 common mistakes made when estate planning
1. No trust fund
If you are doing all the work to minimise inheritance and other taxes, protecting your assets and beneficiaries but not using a trust, your hard work may go to waste. If you are not updating your accounts to be in the name of the trusts, assets won’t transfer the way you have stipulated in your estate-planning documents. Check that you have changed the titles of all your properties and assets when you review your plan.
2. Out of date beneficiaries
Out of date beneficiaries create quite the headache. If you don’t regularly update them, you risk having your assets turned over to people who you may no longer wish to inherit. Perhaps the person is no longer in your life or has proven that they can’t handle the asset. An old spouse or even someone who has also passed might still be named. Your children might not get what should rightfully be theirs if you do not update your beneficiaries. Don’t leave any stone unturned and check and update them regularly.
3. Not listing guardians for minor children
Naming who should be guardian of your children in your will is a hard decision – but it is essential. Pick someone who is not only financially able to support your children, but someone who is in the right place emotionally to take over guardianship. Making sure you secure the best future for your children even in the aftermath of tragedy could help ease the transition during troubled times.
4. Keeping the estate plan to yourself
If you do not share your estate plan with those who will benefit from it whilst you are alive and the plans are easy to explain, your family might run into trouble. Prevent any future problems and gather your family to discuss your reasoning and allocations ahead of time so there is no confusion. Expecting your family to figure out what your wishes were adds a lot of pressure during a time when grieving should be their primary concern.
Review your plan regularly
Be sure that your estate-planning attorney and financial planner are acquainted so they can work together to ensure you’ve covered all the areas to take care of your family once you’ve passed. If your affairs are not in order before you pass away, it will leave your loved ones confused and stressed about your estate. Your family might even be subjected to legal issues without properly defined inheritance and estate matters.
It’s always advisable to discuss your plans with a financial adviser and once you have a plan in place, you should regularly revisit it, as your financial situation can change frequently. A global pandemic, or simply tax changes can all have an impact on your current arrangements.
We’re happy to help with estate planning and can also put you in touch with reliable solicitors for any paperwork needed to execute your final wishes. Don’t delay – contact us today.
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