Baby boomers, which includes those born between 1946 and 1964, have entered and continue to enter into retirement. As they make this financial transition, many boomers are learning that they have made some of the most typical retirement mistakes.
But, even if you’ve made a financial mistake or two, there’s still time to avoid these five surprisingly common estate planning mistakes baby boomers are making in droves.
Mistake #1: Believing Estate Planning is Only for the Wealthy: While baby boomers are not the only ones guilty of this mistake, the common misconception is that only the ultra-rich need to have an estate plan prepared. By some reports, about half of Americans between the ages of 55 and 64 do not even have a will. Because estate planning encompasses not only protection of your assets (regardless of how much you’ve accumulated), but also your healthcare choices, a lack of planning can leave you in a dire situation should any medical issues arise.
Mistake #2: Checklist Mentality: For many, estate planning is just the preparation of legal documents. Once the documents are signed, the client crosses off estate planning from his or her to-do list and moves on. And truth be told, the legal industry itself is guilty of creating this misperception. But don’t be fooled! Your circumstances may (and usually will) change. And the likelihood of this happening increases as time goes by. To ensure your estate planning objectives are carried out, you should update your estate plan every time a major (or sometimes, minor) life changes happen – such as retirement.
Mistake #3: Not Completing Your Estate Planning Homework: Just because the estate planning documents have been signed does not necessarily mean that the planning is complete. It is important that any assets which need to be retitled are done so as soon as possible, before you forget. If the ownership or designations on financial accounts and property do not align with your estate planning strategy, there can be major problems in the future. Improper titling of financial accounts or property can result in an unexpected or undesirable distribution. This can happen because you may make one plan through your will or trust, but the ultimate determination of who inherits will rely on the ownership or beneficiary designation of those assets upon your death.
Mistake #4: Leaving Out Little (And Not So Little) Things: It is important to consider all forms of property, not just the high-value assets when putting together an estate plan. Some of the most commonly overlooked assets include digital assets and family pets. If not expressly addressed in your estate plan, your family may end up fighting over valuable assets, abandoning those they deem worthless, or not even realizing certain assets existed.
Mistake #5: Not Preparing for Life Events & Emergencies: No one has a crystal ball. However, with proper estate planning, you may be able to weather the storm brought on by some of life’s unexpected events or emergencies. With long term care costs increasing year after year, planning for the future possibility of that level of care can save you money and reduce worry if and when it becomes necessary.
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Although many baby boomers have made these mistakes – and unfortunately, won’t realize it until it becomes too late – you do not have to be one of them. Please let us at (913) 871-2188 know if you have any questions about your estate planning options and how to make sure you and your family are protected from these common mistakes.
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