People in Washington and around the country should know about the importance of estate planning. Failing to create or update an estate could create significant problems for your loved ones and for yourself. In addition, poor estate planning can also create issues. Three of the most common issues include:
Financial procrastination
Many people in Washington wait until they are old before they start thinking about estate planning. Recent studies show that approximately 60% of Americans do not have a will or any other type of estate planning document. This is a huge mistake because if something happens to you and you are unable to make decisions for yourself, your family will have to go through the court process known as probate, which could be costly, time-consuming and stressful.
At a minimum, you need a will, a financial power of attorney, and a healthcare directive. These documents will ensure that your wishes are carried out and that your loved ones are taken care of financially if something happens to you.
Not updating your estate planning documents
Your estate planning documents should be reviewed and updated regularly, especially after major life events such as the birth of a child, the death of a spouse, a divorce, or a change in your financial situation. If you fail to update your documents, they may no longer accurately reflect your wishes. For example, if you have not updated your will since you got married and then later divorced, your ex-spouse could still inherit everything.
Uncoordinated beneficiaries
Your beneficiaries should be carefully coordinated to avoid potential conflicts and delays in the distribution of your assets. When updating your will and trust documents, don’t forget valuable assets like your life insurance policies, retirement accounts and annuities. These documents are legally binding and cannot be changed by someone else other than yourself, even if you state in your will that they should go to a different person.
Estate planning is an important but often overlooked task in Washington state. If you can avoid the mistakes mentioned above, your life and that of your loved ones could be secured for a long time.
