Careful advance planning allows people to dictate what happens to their property when they die and to mitigate the fallout of an untimely passing for their family. What each individual requires from their estate plan is different, but there are certain standards and rules that apply regardless of someone’s wishes.
Small mistakes and oversights can potentially minimize someone’s control over their own legacy and protection when they are older and vulnerable. The five mistakes below are among the most common and devastating errors committed when it comes to estate planning.
1. Continuing to procrastinate
The most common estate planning mistake that people make is the often subconscious choice to keep delaying the creation of documents. Quite a few people die without ever having put an estate plan in place. Anyone over the age of 18 will typically benefit from having a basic estate plan.
2. Treating the process as finished after drafting documents
An estate plan is only useful if it will hold up in probate court. Changing state laws and new personal circumstances can make revisions to an estate plan key to someone’s ongoing protection and control over their legacy. Adding and removing beneficiaries, updating the assets included and even revising medical preferences are all steps people may need to take occasionally throughout their lives.
3. Giving beneficiaries a direct inheritance
Maybe someone has young children whose guardian could potentially squander their inheritance before they become legal adults with control over their own finances. Perhaps adult beneficiaries have unstable marriages or personal challenges that might endanger their inheritance. Many testators fail to consider how gaining direct control over an inheritance can lead to poor outcomes in some cases.
4. Not addressing their personal property
Testators often become so focused on addressing their biggest and most valuable assets, like real property, retirement accounts or vehicles, that they fail to consider their personal property that could be worth thousands of dollars and have significant emotional value for family members. Those who don’t include instructions for handing out assets beyond their most valuable resources may create a scenario where their loved ones bitterly fight over certain assets.
5. Only thinking about death and not emergencies
Estate plans should absolutely include testamentary documents that talk about the care of children and the disposition of someone’s property distribution of someone’s property after their death. However, estate plans can also include living documents, like powers of attorney, that can provide support in the event of a medical emergency.
The best estate plans are thorough, highly customized and frequently subject to review for accuracy. Learning about the mistakes that other people make while estate planning and seeking legal guidance when crafting documents can help testators achieve their personal goals.