10 Common Estate Planning Mistakes
Estate planning can be a very overwhelming process.
Do you choose a will or trust? Who should be your executor? Should your assets be divided evenly? Who will take care of your minor children?
There are so many difficult questions that need be answered when drafting your estate plan that it is easy to overlook more intricate scenarios.
Here is a list of 10 common estate planning mistakes that can easily be avoided with proper planning.
-
Becoming incapacitated doesn’t happen on cue. Carefully thinking about your advance healthcare directives (such as end-of-life care and your healthcare decision-making proxy) while you are young and healthy is the best way to avoid a situation where you can no longer communicate your wishes.
-
Along with planing for your healthcare wishes, planning for HIPAA authorization is just as important. HIPPA privacy rules could restrict your family, including your spouse, from accessing your medical records if you become incapacitated.
-
We live in a digital society. Passwords and accounts can easily be forgotten while you are alive — imagine your family trying to recover them once you are gone! We aren’t just talking about assets such as cryptocurrency — social media, digital photos, memories, family records, and other critical documents are all included here!
-
No one wants to imagine their child going through a difficult divorce or lawsuit — but that doesn’t mean its out of the realm of possibility. If this situation does occur, their inheritance could end up with someone you never intended.
-
Again, this is not a fun situation to think about, but if your spouse decided to remarry — then divorce — your estate could end up in someone else’s hands. This could also happen if your spouse becomes a victim of financial predators, which sadly is more common with the elderly population.
-
This could mean many different things depending on your family, but proper planning includes involving family members and/or special planning for children (such withholding funds until a certain level of education is completed).
-
If you named a beneficiary on your retirement account, they are likely to receive those account funds in a lump sum — often creating an unexpected tax bill. Proper estate planning will help protect these assets from certain taxes.
-
Maintaining proper records (that are easily accessible for your beneficiaries) is the KEY to making the most of your estate plans. If overlooked, your loved ones could spend an extensive amount of time trying to make sense of what you own.
-
All too often children fight over their parent’s things — family jewelry, heirlooms, artwork. Comprehensive estate planning includes documents that account for these tangible items.
-
Sure, you established your estate plan already — but has your life changed since then? If your plan does not reflect your current situation, then it will be useless once you are gone. It is important to have your outdated estate plans reviewed by a licensed attorney to ensure that they accurately reflect your current situation.
The biggest mistake?
While these 10 mistakes are incredibly important to consider, the biggest mistake is…
not having an estate plan in place at all!
Avoiding or putting off your estate plan altogether is by far worse than making one of these mistakes on your estate plan.
Always remember,
“Before anything else, preparation is the key to success.”
Are you ready to take control?
Follow these steps to get the ball rolling in your court!
Download our Estate Planning Workbook to help you think through some of the questions you will be required to answer
Review our Estate Planning pricing plans to learn more about how we help you plan for your future.
Get started working with us when you are ready to take control of your legacy!