10 common mistakes that can jeopardize your Estate Planning goals: Expert

People work hard their entire lives to be successful. However, today, be it due to the pandemic or otherwise, people have at least started having Estate Planning goals.

An Estate Plan is a fundamental tool that makes sure that your estate goes to the people of your choosing.

There are few common mistakes that can jeopardize your Estate Planning goals and hence, must be avoided, highlights Raghvendra Nath, Managing Director – Ladderup Wealth Management:

1.       Procrastination or putting off having an estate plan for a later day

Death is inevitable, no one is invincible, and by not having an estate plan in place your assets will be passed as per the Succession laws and may even land in undeserving hands after your demise.

2.      Not having a record of assets

If the assets are not consolidated well and if your loved ones are not aware of your holdings, there are chances that few of them will be lost after your death; a Will helps in avoiding such loss.

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3.      Not seeking the help of a professional

No two persons are same thus, their requirements also won’t be the same and hence it is always advisable to seek a professional expert’s advice to avoid disputes that may arise in future.

4.      Confusing nomination with beneficiary

There is a common misconception that after the demise of the asset owner, his nominee becomes the owner, however that is not the case.

A nominee is merely a custodian of the asset and is not considered a beneficiary in the eyes of the law unless stated in a ‘Will’.

Thus, Estate Planning is very important, but more important is to avoid the common mistakes highlighted above so that your Estate Planning goals as well as your loved ones’ interests are not compromised, during your lifetime as well as when you are not around.

Warren Buffet defines investing as “the process of laying out money now in the expectation of receiving more money in the future.” Investing involves allocating surplus funds across various investment instruments with the intention of witnessing the money grow over time.

Raghvendra Nath, Managing Director – Ladderup Wealth Management Private Limited highlights additional 6 additional common mistakes in investing that can jeopardize investor wealth:

1)       Most people love to spend money before they think about investing it. Thus, whatever is left after spending is saved and thereafter invested. While saving and investment should be the foremost criteria before spending. It is unfortunately neglected.

2)      Failure to understand and evaluate their own risk return requirements. Most investors fail to evaluate their goals, future needs, commitments, requirements, etc. Most of the time investors get carried away by the past performance, future expectation and invest in certain products which may or may not meet their requirements.

3)      Failure to adopt an appropriate asset allocation. Investors fail to consider asset allocation as an integral part of investing. They either replicate plans of their friends or family or blindly follow advice offered by a naïve investor. This at times leads to loss of capital.

4)      Timing the market. We as investors feel we know more about the market trends, inspite of being aware that markets always take unexpected turns and is completely dependent on the global cycles, prevailing interest rates, economic cycle, etc. and thus our ideology of timing the market proves wrong.

5)      Emotional decisions. We all understand and talk about investing when the markets are at a low and selling when the markets are at a higher level. However, when the markets tend to correct, for example at the time of covid pandemic, we feel that the world is coming to an end and being to sell investments left, right and center. Thus, we tend to sell at a lower level and invest at a higher level.

6)      Lack of patience. While an industry, sector or country is undergoing a cyclical change we fail to evaluate it rationally and give our investments certain time it needs to develop.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)