Blog Post
3 Critical Mistakes to Avoid with Estate Planning
- By Admin
- •
- 03 Nov, 2017
No one likes to talk about end-of-life arrangements, but as a responsible adult, you need to make sure your affairs are in order. Unfortunately, only about four out of ten adults actually have a living will, estate plan or living trust in place. Even worse, a lot of those who do have an estate plan have made costly errors in the process that can get in the way later on.
There are good reasons why working with an attorney to create your estate plan is important. No matter how straightforward you believe your will, trust or estate plan to be, there is always room for error. Check out some of the most critical mistakes you must avoid with your estate planning.Taking a DIY Route to Estate Planning
The age of the internet makes it possible to take the DIY route with just about everything, including estate planning. You may be able to create your own, but you may miss something crucial to your desires.
DIY estate plans lack some highly important features and can create some unique problems upon your death. For example, if you make your own estate plan, you could make the mistake of:
- Not considering things like debts, taxes and other contingencies that can be an issue
- Not having enough documentation to cover all of your assets
- Not using the right witnesses to attest to your plans
It is worth noting that witness requirements for estate plans can vary from state to state. Some states require witnesses to be unaffiliated and nonbeneficiary. Some states require more than one witness, while others may only require one. There is no one-size-fits-all DIY estate plan documentation, so having professional guidance is important.
Not Reviewing the Estate Plan Regularly
An estate plan is not something you can create and forget about; It must be revisited throughout the years of your life. Change is frequent, with family dynamics, assets and resources always being rearranged and altered. If you make an estate plan now and never revisit it to make adjustments, some pretty big problems can come up when you pass away, such as:
- Your beneficiaries are no longer living
- Your estate plan is greatly affected by new probate or estate laws
- Your number of logical beneficiaries changes due to marriage or the birth of a child
- Your plan for even distribution of assets is impossible because of a drastic change in those assets
There is not necessarily a set number of years that should pass between estate plan reviews. Rather, you should check your estate plan after or during major life changes or events, such as when you retire or if you get a divorce.
Forgetting to Include Life Insurance Benefits with Your Estate Plan
Life insurance is one more layer of responsibly planning for your passing. However, it is not completely separate from your estate plan, or at least it shouldn't be. If you have one beneficiary listed on your life insurance policy and that same person is not included in your estate plan beneficiaries, this discrepancy can create problems.
Additionally, life insurance payouts should be figured in with your total estate because they may be taxed the same depending on the state where you live. Failure to consider life insurance payouts as part of your overall estate can leave your designated executor with a much higher estate tax to contend with than they planned.
A good estate plan gives you great peace of mind in knowing that when you leave this earth, your plans will be carried out and your property will be properly distributed among those who are important to you. For help with your personal estate plan, contact us at Osinga Law Offices, S.C.