Don't Make These Common Estate Planning Mistakes

Law Blog

Estate planning can help people protect their assets and ensure that their wishes are carried out when they pass away. However, there are some common mistakes people make during estate planning that can lead to unintended consequences.

1. Failing to create an estate plan is one of the biggest mistakes people make. Without a proper plan in place, the distribution of assets and the care of dependents will be determined by the default laws of the jurisdiction, which may not align with your wishes.
2. Another common mistake is delaying the estate planning process. Estate planning should be done as soon as possible to ensure that your wishes are known and legally documented. Waiting until a crisis or illness can limit your options and may result in rushed or incomplete planning.
3. Estate planning is not a one-time task. Life circumstances, such as marriages, divorces, births, deaths, or changes in financial situations, can significantly impact your estate plan. Failing to review and update your plan regularly can lead to outdated instructions and unintended consequences.
4. Estate taxes can significantly impact the value of your estate and the distribution of assets. Failing to consider tax implications and implement appropriate strategies can result in unnecessary tax burdens for your beneficiaries.
5. Many assets, such as life insurance policies, retirement accounts, and bank accounts, allow you to designate beneficiaries. Failing to update or review these beneficiary designations can lead to unintended consequences. It is advisable to update beneficiary designations on a regular basis so that they agree with your current wishes.
6. Estate planning is not just about what happens after you pass away; it also involves planning for potential incapacity. Failing to establish powers of attorney for healthcare and finances or create advance directives can leave important decisions in the hands of the court or individuals who may not know your wishes.
7. While it may be tempting to use online templates or do-it-yourself estate planning kits, this approach can lead to errors and oversights that may render your plan invalid or ineffective. Estate planning involves complex legal and financial considerations, so it is advisable to work with an experienced estate planning attorney who can provide personalized advice and ensure your plan is legally sound.

Avoid these common mistakes and seek professional estate guidance to help ensure that your estate plan accurately reflects your wishes and provides for the smooth transfer of assets to your beneficiaries. Speak to an estate planning lawyer to learn more.

19 June 2023