What is Estate Planning?
An estate plan is a legally binding document that details how a person should handle their assets should they pass away. This plan may include the creation of a trust, designating beneficiaries, provisions for taxes, and other legal or financial advice. The estate planning process can be quite complex and confusing. That’s where lawyers come in.
Estate planning is very important because it can help with your legacy – how you care for your loved ones after you die. It allows your family to maintain your financial affairs in the most efficient way possible while providing them certainty in their future.
Mistake 1: Not Setting Up Your Will
The key to a well-prepared estate plan is to properly plan how your assets will be distributed. Unfortunately, many people neglect the importance of having a will. If you are not able to make your own will, you should consider hiring an estate lawyer or other professional to set up one for you.
It can be difficult to decide who should be in control of your estate if no one knows what the person would want. Giving your assets away without a will can cause great harm. For example, if you have children and they are left without any support, they may suffer emotional distress or even go into financial hardship.
Setting up your will is important because it can help ensure that everything is handled in an orderly fashion after the passing of the person. Not having a will can cause problems for beneficiaries who are unsure of their entitlements and who might think they are entitled to more than what is actually theirs. At the same time, without an estate plan, it would be difficult for your family members to claim their inheritance. This is because some states have laws that prevent beneficiaries from being able to claim their inheritance until certain time limits have passed.
Mistake 2: Not Having an Estate Planner Review Your Wills & Trusts
Most of us who are of the age to make wills and trusts probably did not know of the importance of having one. This is because most estate planners or lawyers won’t review your will until you die.
An estate lawyer takes charge in helping you to outline your wishes, including your assets, beneficiaries, assets, and your care for family members after death. They also help you manage tax liabilities during your lifetime and after death.
It is important to have an estate planner review your wills and trusts in order to be sure that they are up-to-date.
Estate planning is not something that you should put off until you die. It’s not something that can be done overnight, but in the future when you need help, it could be too late.
Mistake 3: Ignoring the Finances & Giving Away to Charity
If you’re a millennial, chances are good that you don’t have a lot of money. The average millennial has about $3,000 saved for retirement and what money they do have is spread thin.
The difference between saving and giving is not about money. Many people tend to think that giving away your time or resources is the difference between saving and spending. But in reality, it’s really about mental health. Many people ignore their financial situation and spend more than they should. This often leads to a lot of financial stress.
In a study carried out by the University of Warwick, it was found that people who give to charity experience a higher level of both physical and mental health than those who save their money. It was also found that those who feel they have saved enough money to live on their own do not save as much as those who don’t believe that they need to save up for anything in particular or any other purposes such as retirement.