Estate planning is not always the first thing that comes to people’s minds when they think about the future. But it should be. Making sure your affairs are in order and your assets will be handled the way you want them to be handled is an important way to make sure your family is taken care of after you die.
Here are some of the most common mistakes that you should avoid when thinking about your estate plan.
1. Not having an estate plan
The most obvious mistake that people make is never making an estate plan to begin with. But having a plan for the future and making sure all your assets are in order is the best way to ensure that your loved ones will be taken care of once you’ve passed.
2. Not planning for disability
While we all know that death is inevitable, it’s impossible to predict what else the future may hold. That’s why it’s so important for your estate plan and your family to include a plan in the case of disability. Appointing a power of attorney grants someone the power to make healthcare decisions for you and handle your finances. You can also create a living trust to designate a person to manage your assets for the eventual beneficiary.
3. Failing to update the plan over time
Creating your estate plan – and including a plan for the unexpected- is a great first step. But as time goes on, your plan may need updating. You may have more children or grandchildren (i.e., more beneficiaries), you may acquire new property or other assets, or experience a myriad of other changes. Once you have your plan in place, be sure that you keep it up-to-date.
4. Choosing the wrong person to handle your estate
Choosing someone to handle your estate is an important decision, and not always an easy one. Your spouse or child might be your initial choice, but it’s wise to choose a third party who has nothing at stake and is not personally invested in your affairs. That way, this person will be able to deal objectively with all your wants and wishes you laid out in your plan.
5. Making ownership of assets mistakes
There are several possible mistakes to watch out for in regards to ownership of assets, including:
- It’s helpful to own property jointly as spouses.
- Don’t title business property in your own name.
- Don’t mix your retirement account with your trust.
- Don’t deed your real estate to your children or sell it for $1. (It will be considered a gift, creating a gift tax liability and many more problems than you intended for your child.)
6. Failing to keep important documents somewhere safe
Once you’ve organized all the necessary documents for your estate plan, you need to keep them all together in a safe place. Most people feel confident leaving their planning documents (wills, powers of attorney, healthcare powers of attorney, list of beneficiaries, letters of intent, etc.) in a safe deposit box in a bank. However, keep in mind that some states require your family to obtain a court order to open this safe deposit box after your passing. You could put the safe deposit box in the name of your living trust (discussed above in Point 2), keep them in a safe that someone else has the combination to, or keep them with your estate planning attorney.
Which brings us to our last point…
7. Not working with an experienced estate planning attorney
Failing to work with an estate planning attorney may very well be the biggest mistake you can make once you’ve decided to plan your estate. Only a lawyer experienced in this field can and make sure that you understand all the terminology. Plus, an attorney can objectively advise you throughout the process (particularly when it comes to tax-planning strategies).
If you want to avoid all these mistakes and want to ensure that your loved ones will be taken care of after you pass, contact Candice O’Neil today. Our legal team is ready to help you through each step of the planning process and ensure all your needs and wishes are met.