The most fatal of all estate planning errors, no pun intended, is failing to have an estate plan. Perhaps you are hesitant to create an estate plan because you assume it will cost too much or it just seems morbid to think about. Or maybe you are procrastinating because you haven’t quite decided on who should get what when you die. However, don’t let the goal of a so-called perfect plan be the enemy of getting a perfectly good plan in place.
The worst thing you can do is to do nothing at all and assume everything will pan out in the end. No matter how much (or how little) money you have, you need at least a simple will. A will lets you decide who is charge of overseeing the transfer of your wealth and who gets what when you die. If you die without a will (in legalese, “dying intestate”), the state will determine who gets your stuff. And if you and your spouse die leaving behind minor children, the state will also decide who takes care of them.
Without an estate plan, it is likely your assets will get divided in a way that makes you roll over in your grave. When the court decides how to divvy up your estate, people you assumed would inherit your stuff may actually get nothing. The state doesn’t know who you love. It won’t make gifts to your favorite charity, your best friend, or your favorite second cousin Margo. Likewise, the state won’t know who would make the best guardian of your children.
Read the rest of the series on Estate Planning Mistakes to Avoid:
Mistake #2: Assuming a Will is All You Need
Mistake #4: Creating Multiple Probate Estates
Mistake #5: Giving Gifts to the Wrong Beneficiaries
Mistake #6: Failing to Implement the Estate Plan