Estate planning is probably not the most entertaining activity for most Californians; however, planning appropriately the first time around can prove beneficial in a number of ways. Regardless of one's life chapter, the details to planning a will can seem overwhelming. The following information dives into the topic of estate planning and gives a few ins and outs of this legal and financial process.
In the opinion of one U.S. News contributor, Americans are entirely too lax when it comes to estate planning. This is why countless families find themselves in tricky situations when a loved one dies without a clear will, or without one at all. The article draws from a BMO Wealth Management Study, showing that, at the time of the article's 2017 release, 52 percent of adults in the country had not made a will. 40 percent of those surveyed admitted they had not even begun discussing estate planning needs with other family members. According to U.S. News, the following estate planning mistakes are among the most common:
- Failure to review documents
- Not funding a trust
- Failure to properly handle paperwork
Other common mistakes involve giving away too much too soon: U.S. News warns readers that some children lose ambition when given large sums of money at an early point in life. It is also important to space out inheritance to receive benefits over the course of one's lifetime. Children who do not understand this strategy may need a family meeting to clarify the process.
Investment News adds that life insurance is another vital step in planning a will. Many attempt to fill in the gaps with estate insurance by covering the value of an unemployed spouse. While this strategy can prove advantageous, Investment News shares that, on the other hand, insuring against a nonworking spouse's loss of life is also an important part of estate planning.
Protecting a loved one from identity theft is another key factor in the process -- Investment News points out that some states now allow individuals to determine a fiduciary who has the power to manage aspects such as social media accounts. Whether a family member has just started estate planning or needs to clear up some confusion, understanding common mistakes and learning how to avoid them can help beneficiaries preserve wealth for years to come.