When most people set up their estate plan, they do so with the intention of making sure their assets are “passed down” to friends and family members in alignment with their wishes. However, there are several critical (yet easy-to-make) mistakes that could derail the entire estate planning process and leave your loved ones scrambling through a time-consuming—and oftentimes costly—probate process.
Here are 4 estate planning mistakes you’ll want to avoid:
#1. Failure to Create a Plan in the First Place
By most estimates, 50-60% of Americans do not have a last will and testament in place. While thinking about how you would like your assets distributed after you die is uncomfortable at best, it is necessary. If you die without a last will and testament, neither your family nor the courts will know how you want your assets distributed. Your estate will have to be probated using estate administration, which can be stressful, time-consuming, and costly for your family members, and your assets will be distributed following the state’s intestacy laws rather than your own wishes. As a result, your assets could go to heirs that you do not want to receive them!
#2. Lack of Communication
Communicating with your family and loved ones about the wishes and intentions outlined in your estate plan can eliminate surprise and hurt feelings later. Not explaining your plan could create a rift between your family and friends after you die, especially if the estate plan is not what they expected. Even though open communication may be uncomfortable at first, it can mitigate any negative feelings and allow for a much smoother transfer of assets when the time comes. No one wants their legacy marred by drama or altercation, and clear communication can prevent that from happening.
#3. Overlooked Essentials
One of the most common mistakes made in regard to estate planning is overlooking important tax implications. Consulting with an estate planning attorney or financial advisor can help you make decisions that will ultimately prevent your family from owing hefty taxes at your death.
#4. Setting it and Forgetting it
Another common estate planning mistake is forgetting to update your estate plan. Just because you created an estate plan doesn’t mean that the work is done. When life changes occur—whether that be divorce, the addition of a new family member, a family member struggling with addiction issues, etc.—you should make it a priority to update your estate plan to reflect those changes. Having an ex-spouse inherit your hard-earned assets after a tragic accident would only add insult to injury. We recommend an annual review of your estate plan.
If you have questions about your own estate plan or are interested in starting your own, we encourage you to contact Miller Estate & Elder Law at (256) 251-2137 or register for one of our free estate planning workshops using the brief form below:
