Making a major mistake with your estate plan could result in financial ruin, trouble in court or massive taxes. There are dozens of things that could go wrong, but a few are more likely than the others.
Leaving your assets outright to your children is one of the major mistakes you can make. Using only a will is another. Finally, not avoiding probate is a serious concern.
1. Leaving your assets outright
Most parents want to leave something behind for their children when they're gone, but it's in your best interests not to leave those assets to your children directly. Consider using a trust, so you can have some control over when your children receive assets and how those assets can be used. Using a trust may also help your child avoid having to share the inheritance with his or her spouse.
2. Not having a will
A will is a necessity for many reasons, but the primary reason is because it's needed to avoid probate. A will also dictates your wishes with guardianships and other important decisions.
3. Not avoiding probate
No one should leave their children to face probate court when their will isn't complete or the estate isn't in order. When an estate goes to probate, the courts determine, based on state law, how to divide your assets and dole them out to your beneficiaries. This doesn't always work out in the way you would have liked and could be an added source of stress for your relatives.
It's difficult to make sure your estate is set up perfectly on your own, especially with frequently changing laws. Your attorney can help, so you can rest easy.
Source: Forbes, "7 Big Estate Planning Mistakes: Leaving Assets Outright To Adult Children," Bob Carlson, March 06, 2018