We've covered estate-planning statistics in previous blogs, so it's probably no surprise to our readers that over half of all adult Americans don't have a will. Common estate-planning misunderstandings are one reason this is the case, and even once you get around to planning, you might make more common errors that can lead to financial loss or extra work and worry in the future.
One common error is simply not thinking that you need a will or other estate planning document. Some people think that wills are for the wealthy, but in reality wills can help anyone protect assets and legacies. Even if you have nothing you think should be passed on to your heirs right now, if you have minor children estate planning is critical to stating your wishes about their care should something happen to you.
A second error people make is thinking they don't need an estate plan because they have a simple life and simple finances. Everything is in a single bank account, you have one house and no investments, so you think it's all cut and dry. It might be cut and dry, but that doesn't mean you don't need a will. Without a will, your assets enter probate and are handed out according to the cut-and-dry law on inheritance -- and that might not be aligned fully with your wishes.
A third mistake is waiting too long to begin estate planning. Starting earlier gives you more time to plan and grow wealth. It also lets you have a better chance at purchasing life insurance and long-term care coverage.
Finally, many people think it's easy to DIY a will. Working with a professional helps you avoid many other mistakes when it comes to estate planning, which can save you a lot of time and money in the future.
Source: Forbes, "7 Common Estate-Planning Blunders Not To Make," Sheryl Nance-Nash, accessed Dec. 02, 2016