Estate planning is a necessary part of every individual’s life. It is the process of arranging for how the estate will be managed once an individual passes away and should be taken care of before an individual becomes ill or incapacitated.
One’s estate not only includes their property, but also all assets, legal rights, and net worth. If estate planning is not properly fulfilled during one’s lifetime, the remaining family members may struggle to settle the estate after their loved one passes away.
5 Most Common Estate Planning Mistakes
The following are common mistakes that occur during estate planning that should be avoided.
# 1 Having No Plan
First and foremost, failing to complete an estate plan is a very common issue, specifically with younger people. Individuals tend to allow the busyness of life and other responsibilities override the need to plan their estate, or they simply don’t believe it will impact them.
Unfortunately, when accidents occur, or loved ones are lost to illness, an unplanned estate risks the financial future of the estate, as well as the family’s ability to manage the estate. To avoid this, simply begin to create your estate plan sooner rather than later. It is also important to update your estate plan every five years or as major changes in assets or life occur.
#2 Failing to Name Beneficiaries
A second common mistake in estate planning is failing to name a beneficiary. If a beneficiary is not listed, the deceased’s accounts become part of the probate estate. When this occurs, it is difficult for family members to gain access to any funds or items listed in the estate.
Similarly, failing to name a contingent beneficiary may raise issues. If the primary beneficiary passes away before the estate owner, and there is no contingent beneficiary listed after the owner passes, the funds will again become part of the probate estate. Simply list at least two beneficiaries in order of who should inherit the estate. This ensures the estate will be passed on with minimal legal issues.
#3 Failing to Specify Arrangements
Another mistake in estate planning involves not detailing one’s wishes for final arrangements. By omitting these wishes, the family of the deceased becomes responsible for making hospice care, funeral, and burial decisions.
Be sure to include these wishes (and wishes for end-of-life care) in the estate planning documents. This will ensure all wishes are honored after the owner passes, while also lessening the stress placed on loved ones.
#4 Leaving the Estate Plan Inaccessible
Since the estate plan is an important legal document, it can be tempting to store the document in a secured area, such as a lockbox, safe, or bank safety deposit box to ensure that it remains safe.
However, family members will not know where to find, or how to access the estate plan documents. Be sure to discuss its location with family members so they are able to access it, when needed, without stress or complications. If the document is protected by a combination lock, consider making some arrangement so the necessary people have access to this secure location.
#5 Failing to Plan for Minor Children’s’ Care
Unfortunately, there are cases where parents die unexpectedly, and their children are left without a guardian listed in an estate plan. It is wise to list a guardian (with the guardian’s consent), while also listing how the child should be financially supported.
This helps to avoid any issues that may arise if the guardian is left to determine how the money will be handled. Additionally, you may want to consider purchasing life insurance for yourself to ensure that your child is financially protected after your passing.
We’re Here for You
If you have questions pertaining to wills, health directives, trusts, and estate planning, or need assistance in navigating issues pertaining to the estate planning process, we are here to assist you.
At Apfelbaum Law, our experienced lawyers are prepared to guide you through this sensitive and sometimes overwhelming planning process. Contact us today to schedule an estate planning consultation.
