Estate planning is very important, as mistakes can have a negative impact on your family. Unfortunately, people still make some avoidable mistakes, often because they simply don't realize it at the time. To help you avoid this potential pitfall, let's look at one of the biggest mistakes: Failing to update the will.
The trap here lies in thinking that simply having a will is enough all on its own. Once you complete your will, you assume that your estate planning is done.
Writing a will is wise, and it's certainly better to have one than not, but that does not mean you can forget about it. You need to update it to reflect any major life changes. These can include the following circumstances:
- A death in the family
- The birth of a grandchild
- Starting a new company
- Selling an existing company
- Passing the business on to an heir before passing away
- Buying new property
- Selling your home
- Cashing in your investments
- Getting a new life insurance policy
These are just a few examples, but you can see how they can impact your plans. Different heirs may inherit specific portions of your assets, which could change over time. You may also want to consider any marriages or divorces in the family. Anything that causes a major change means it's time to at least review your plan to see if it is still viable.
While this is one of the most common estate planning mistakes, it is certainly not the only one. Make sure you are well aware of the steps that you need to take.