Planning for and talking about death is not easy for most people and crafting an estate plan can seem overwhelming. However, a well-structured estate plan can ensure that your assets will distribute according to your wishes after you die.
At the same time, it is important to avoid common mistakes when creating your estate plan.
Neglecting to update your estate plan
Having an estate plan is not enough if it is out of date. Life events such as marriage, divorce, births and deaths can dramatically change your estate planning needs. Make sure you review and update your plan whenever significant life changes happen.
Not planning for potential incapacity
An estate plan should have directives in place if you become unable to manage your finances or make healthcare decisions. Including a durable power of attorney and advance medical directives can help ensure that your family follows your preferences when handling your affairs.
Overlooking taxes
Taxes can significantly reduce the value of your estate. While Virginia does not impose an estate tax, the federal government does. Understanding how to limit tax liability can maximize the value of your estate for your heirs.
Not communicating your intentions
Another common mistake is failing to discuss your estate plan with your loved ones. While these conversations can be difficult, they can prevent surprises and potential disputes after your death.
Leaving your digital assets unattended
In today’s digital age, you must not overlook your digital assets. These include online bank accounts, social media profiles, email accounts and digital photos or documents. Make sure your estate plan includes instructions on how to access and manage these digital assets.
Through careful consideration and avoiding these missteps, you can create an estate plan that protects your assets, honors your wishes and provides for your loved ones in the best possible manner.
