Estate planning can be invaluable—not just to you, but to your entire family. Indeed, the benefits are numerous—yet complacency causes people to make simple errors that render their estate plan meaningless. The attorneys at our estate planning law firm see this happen all the time; in fact, part of our job is helping clients identify these common mistakes and make the necessary efforts to sidestep them.
That’s basically what we hope to accomplish in this post. We’re going to highlight some of the most common estate planning mistakes, and give some quick tips on how to avoid them. Ultimately, of course, we recommend that you hire an estate planning lawyer to help keep your plan free and clear—but in the meantime, here’s a quick guide.
No Estate Plan
Talk about the estate planning basics! This is the most common error of all, and arguably the easiest to rectify.
Having no estate plan means asset transfers are harder, and many can be reduced by taxes and other dues to the State. And it virtually guarantees that your estate winds up in probate court, which can lead to a lot of hassle and headaches for the loved ones you leave behind.
Generally, this mistake is committed because people fail to prepare for emergencies, acting only when it is too late. Don’t wait until you think you “need” an estate plan. Get the ball rolling today!
Outdated Will
Another one of the most common estate planning mistakes is allowing your will to go out of date. No, you can’t just set it and forget it. We recommend that you update your will routinely—as often as once each year.
Estate planning is not a one-off affair, and the documents need to be regularly updated to accommodate life changes—changes to your family dynamic, but also changes to the size of the estate. It is also important to keep track of new estate laws that can affect your will and the tax burdens it incurs.
No Backup for Disability
Another one to file under “estate planning basics.” Remember that estate planning is about preparing for death, but also for the possibility of serious infirmity—even disability.
Whether partial or complete, temporary or permanent, disability disrupts not only a person’s life but financial standing as well. Estate plans without clauses relating to sudden medical conditions lead to wrong assumptions about medical care and financial management for the principal.
Make sure disability is something you think about as you make your estate plan.
No Gifting Strategies
Estate owners focus too much on their inheritors, to the point that they forget about cost-cutting plans like gifting. In the end they lose most of their assets to taxes and other related financial obligations, reducing what they can transfer to their inheritors.
When you go to hire an estate planning lawyer, make sure you choose someone who will help you leverage all the tools and strategies at your disposal for preserving the size of your estate.
Poorly-Written Documents
When writing out your estate planning documents, specificity is key.
Using a more general language is sadly common, however, either to save time and effort or due to a simple lack of foresight. For example, many wills say ‘my surviving children’ instead of naming specific children. This kind of inexact language confuses executors and can lead to legal challenges and mishandling of the principal’s request.
Again, you can hire an attorney to make sure your language has the proper level of precision.
No Beneficiaries
We see this in many of the estate plans we review: No beneficiaries are named either because the original beneficiary died and the document was not updated, or there were no beneficiaries to begin with.
People may conflate beneficiaries with either trustees or inheritors and overlook this, leading to more IRS-related issues.
Always make sure you name beneficiaries for any trusts present in your estate plan.
Planning Around Specific Assets
This one can actually cut both ways. Generalized estate plans are not ideal but overly-specific ones are just as bad. Combined with wills that are not updated, it can lead to some inheritors or beneficiaries not receiving anything from the plan.
Not Seeking Professional Help
Finally, DIY estate plans are common, but not everyone can handle the process effectively. Mishandled DIY plans can lead to even worse legal repercussions, such as larger estate tax dues or longer probate periods. Talk to a legal professional to avoid this.
Always remember: Estate plans are complex and interconnected, with one small mistake causing a major problem for the whole document. That’s why the trained eye of an estate planning lawyer can be invaluable
To speak with a lawyer at Singh Law Firm—whether about wills, trusts, advanced healthcare directives, or general estate planning needs—contact us today.
