Estate planning is an important process that everyone should undertake to ensure their assets are distributed according to their wishes after they pass away. However, even the most well-intentioned people can make mistakes when it comes to estate planning. In this post, we’ll explore the top 5 estate planning mistakes people make and provide tips on how to avoid them.
Failing to Update Beneficiaries
One of the most common estate planning mistakes is failing to update beneficiaries. Many people assume that once they’ve designated beneficiaries for their retirement accounts or life insurance policies, they’re all set. However, failing to update these designations can lead to unintended consequences, such as an estranged family member receiving assets that were intended for another. To avoid this mistake, it’s important to review and update beneficiary designations regularly, especially after major life events such as marriage, divorce, the birth of a child, or the death of a family member named as a beneficiary.
Forgetting to Include Certain Assets
Another common estate planning mistake is forgetting to include certain assets in an estate plan. For example, people may overlook digital assets such as social media accounts or cryptocurrency, which can be valuable and need to be properly accounted for. To avoid this mistake, take an inventory of all assets and make sure they’re included in the estate plan.
Not Considering Tax Implications
Estate planning can have significant tax implications, and failing to consider them can be a costly mistake. For example, failing to take advantage of the annual gift tax exclusion or failing to properly structure a trust can result in unnecessary taxes. To avoid this mistake, schedule a consultation with us so we can help you navigate the tax implications of an estate plan.
Not Planning for Incapacity
Estate planning isn’t just about what happens after someone passes away – it also involves planning for incapacity. Failing to plan for incapacity can lead to family members having to go to court to obtain guardianship or conservatorship over a loved one. Furthermore, if your health care wishes aren’t clearly stated somewhere, family members could end up in disagreements over your medical care. To avoid this mistake, we include a durable power of attorney and health care power of attorney in our estate plans.
DIY Estate Planning
Finally, the biggest mistake people make is attempting to do estate planning themselves. Estate planning involves complex legal and financial issues that require expertise and experience. Attempting to do it yourself, while cheaper up front, can lead to costly mistakes and unintended consequences. To avoid this mistake, work with us to help ensure that your wishes are carried out according to your wishes and that you have an estate plan that is built to last.
In conclusion, estate planning is an important process that should not be taken lightly. By avoiding these common mistakes and working with an experienced estate planning attorney, you can help ensure that your assets are distributed according to your wishes and that your loved ones are taken care of after you’re gone. Schedule a free initial consultation with us today to avoid these mistakes.