Estate planning is an important component in any wealth management plan, yet many individuals often forget about it and then only take the necessary steps to plan their estate when it’s too late.
That said, below are some of the most common mistakes individuals make with estate planning:
- Grammatical and spelling errors that result in changing the will’s meaning.
- Creating the will without thought to an upcoming marriage or failing to update the will. Take note that marriage makes a valid will invalid.
- Failing to understand the responsibilities and roles of an executor and assigning an unfitting individual as the executor.
- Failing to properly provide for what might happen in the event that a beneficiary passes away. For example, what will happen to the deceased beneficiary’s share?
- Not reducing the risk to an ‘Estate of a Family Provision Application’ such as when someone contests the will.
- Failing to obtain accurate advice regarding the potential tax consequences that your beneficiaries would shoulder. For instance, if you leave your superannuation to your adult child, relevant authorities could impose the highest tax rate on it.
- Failing to provide a ‘binding death nomination’ to your superannuation, even if it’s legally allowed, and in turn enabling your superfund’s trustee to decide who gets your superannuation aside from you.
- If you’re leaving something for a young child, failing to nominate a suitable guardian and/or specify at what age the child should inherit.
- Not being aware of and having an Enduring Power of Attorney that would allow a suitable individual control of your financial affairs in the event that you lose the capacity to do so or pass away.
- Failing to accurately execute and witness the will.
Estate planning is a specialised and highly complex area of law that when done poorly would definitely open up your estate to various risks, explains estate planning attorneys in Townsville. They add that even individuals who are successful financially might be simply unaware of the potential issues that could arise regarding the distribution of their estate under a will.
To that end, keep the above mentioned estate planning mistakes in mind and consider getting professional help to make certain that your wishes would be upheld even if you have passed away.