Common Estate Planning Mistakes or Misconceptions

Estate planning can be complex. Often times individuals have these misconceptions or misunderstandings that lead to mistakes down the road.

  1. Thinking you don’t need to start estate planning yet can be a mistake. It’s important to start the process early, regardless of age or wealth, as unexpected events can occur at any time. This is especially true if you have children or aging parents.
    Preparing a Will has nothing to do with your age or your health.
  2. Not having a Will or Trust can create many unforeseen problems. Failing to create a will or trust is a significant mistake. Without these documents, your assets may not be distributed according to your wishes, and the state’s intestacy laws will control what happens with your property. Something as simple as having a 401k or IRA might mean you need a Will or Trust to make sure that you control what happens with that savings you earned.
  3. Doing a Will only once and never reviewing or revising it can leave major gaps. Life circumstances change, such as marriage, divorce, birth of children, or significant financial changes. Failing to update your estate plan to reflect these changes can lead to unintended consequences and inconsistencies.
  4. Not reviewing other financial documents when you prepare a Will or Trust. Neglecting to update beneficiary designations on retirement accounts, life insurance policies, and other financial assets can result in assets passing to unintended recipients, being subject to probate when you sought to avoid probate, or going into a financial instrument set up by someone else.
  5. Not updating title to assets once you have prepared a Trust or a Will The way you hold and title your assets can affect their distribution. Failing to properly title assets in accordance with your estate plan can lead to complications and delays in the transfer of assets. You might want an asset to pass through probate according to your instructions in your will but it is titled in a way that keeps it out of probate entirely. Or you might want to keep an asset out of probate with a trust but failed to update the title.
  6. Everyone should plan for incapacity. Many people focus solely on the distribution of assets after death but overlook planning for incapacity. Establishing documents like a durable power of attorney and healthcare directives can ensure your wishes are followed in case of incapacity.
  7. Don’t forget Digital Assets: With the increasing prevalence of digital assets, such as online accounts, cryptocurrencies, and social media profiles, it’s crucial to consider these in your estate plan. Consider providing instructions on how to access and manage these digital assets.
  8. Always communicate your plan to your beneficiaries, friends and family. Not discussing your estate plan and intentions with your loved ones can lead to confusion, disputes, and unintended consequences. Openly communicating your wishes can help avoid misunderstandings and ensure your intentions are known.

    Please contact us to discuss any of these concerns you might have about your current plan or situation so we can create or update a plan that suits your needs and goals.

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