Prevent costly mistakes: Avoid common errors in estate planning

Securing your financial future and protecting your loved ones requires careful planning. Unfortunately, many people delay or overlook details, leading to unnecessary hardships.

Common but preventable mistakes such as failing to update a will, underestimating life insurance needs or neglecting retirement planning can have unintended consequences. 

Don’t delay in drafting a will

Many assume wills are only for older individuals or those with significant assets, but this isn’t true. Without a valid will, your estate may be distributed according to the Intestate Succession Act 81 of 1987, resulting in potential disputes, delays and unintended heirs receiving portions of your estate. Moreover, a will allows you to assign guardians for minor children, ensuring they are cared for by someone you trust. Keep your will updated to reflect life changes such as marriage or the birth of children, and avoid legal complications.

Get adequate life insurance cover

Many underestimate how much coverage their family will need or choose the wrong type of policy. Life insurance isn’t just about covering funeral expenses — it also helps your family replace lost income, pay off debts and cover future costs such as education. Settling for a small policy can leave your dependants financially vulnerable. Term life insurance, which provides coverage for a fixed period, is often more affordable but may expire when it’s needed most. Life insurance, which builds cash value and lasts a lifetime, is a better option for long-term security.

Start saving for retirement now

The power of compound interest means the earlier you start saving for retirement, the more your investments can grow. Even small, consistent contributions can make a big difference over time. Waiting too long to save can lead to financial insecurity later in life. Additionally, many underestimate how long they will live in retirement, which can result in outliving their savings. Tools such as living annuities provide a steady income during retirement, but careful management is necessary to ensure these funds last.

Create a living will

A living will is a legal document that allows you to outline your preferences for medical treatment and care when you are unable to communicate your wishes due to illness or incapacity. Creating a living will is a proactive step to ensure your medical care preferences are respected. This avoids leaving family members with tough choices in stressful situations.

Many of the mistakes in financial and estate planning are due to procrastination or underestimating future needs. Proper planning — drafting a will, securing sufficient life insurance and saving for retirement— provides financial security and peace of mind. By taking these steps, you can protect your family and ensure your legacy, leaving your loved ones with clarity and support during life’s inevitable transitions.

Connect with the team of experts at PW Harvey & Co. today.

This article was sponsored by PW Harvey & Co.