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Estate planning: Common mistakes and errors

People often assume that estate planning just means writing a will. That's a good place to start. The biggest mistake people make is not drafting a will or doing any planning whatsoever. But that doesn't mean that a will is all you need or that there aren't other mistakes you should guard against.

For one thing, you need to consider all of your options. Is a trust better than leaving money to an heir directly? Do you want to set money aside for special purposes, like charities or education? Do you want your estate plan to consider your healthcare needs and end-of-life decisions? A complex plan should be about far more than leaving property to your kids. Thinking about an estate plan in such simplistic terms, and failing to look at all the options you have, is a dire mistake.

It's also a mistake not to update your will and your estate plan at certain times in your life. Some times to consider updating your will include when a child is born, when you marry (or you divorce), when you sell a major asset or you acquire a new one and when you get an inheritance from your own parents. It's a mistake to think that the estate plan you made 10 years ago still applies perfectly today.

Another one of the biggest estate planning mistakes people make is similar to not making a plan at all: procrastinating. Plenty of people think up the perfect plan, talk about it with their spouse, and even look into all of their options -- and then put off actually drafting the documents. Remember, when the unexpected happens, you already want to have your estate plan in place.

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