There are numerous mistakes to avoid making on a will or trust that could compromise the inheritances your beneficiaries will receive. One mistake you can make involves creating your own will.
You probably also know that you need more than a simple will in an estate plan. However, there are plenty of other actions to avoid because they can either be expensive and lengthy to fix or can compromise how much money your children end up receiving.
Choosing an inadequate executor
Most people will select a trustworthy family member or close friend to serve as the executor of the estate. It is paramount to select someone who has the integrity to conduct these duties responsibly. In the event you choose someone to be executor who is not dependable, then other family members may contest the will. This can lead to lingering animosity amongst the family as well as unnecessary costs.
Naming incapable beneficiaries
Many people have children or other beneficiaries who cannot handle receiving an immense amount of money at one time. There may be fears amongst other family members this person will squander the funds. In these cases, it may be preferable to put the money in a trust where someone else determines how much money the beneficiary receives.
Failing to update the estate plan
Creating a will and trust is not something you do early in life and then leave alone. You need to regularly update the documents as the circumstances in your life change. For example, many people need to alter a plan after divorce. You may also realize you need to change the forms when you get a substantial raise at work. It is for this reason people should look at their estate plans at least once a year to see if anything requires an update.