While it is essential to consider creating an estate plan, avoiding common mistakes is also just as important. The following is a listing of the ten estate planning mistakes to avoid as you begin creating your estate plan or updating your existing one. Although it is important to prepare for your own future, the experienced estate planning attorney at The Law Office of Aubrey Carew Sizer PLLC can help ensure that at your death, or in the event of your incapacity, decision makers you select can carry out your wishes and your family's financial and legal rights remain protected. Contact our compassionate legal team today at (571) 403-2619 to learn more.
1. Failure To Plan
The most substantial mistake that people make with respect to estate planning is failing to create one at all. Unfortunately, failing to create any kind of estate plan can result in serious legal and emotional challenges for surviving family members. According to the American Bar Association, dying intestate (without a Last Will and Testament) means that a person's assets become subject to state laws, which may not accurately reflect the deceased's wishes. Additionally, dying intestate can result in caustic family disputes and cause considerable legal battles in court. For detailed advice regarding your specific situation, contact us at The Law Office of Aubrey Carew Sizer PLLC at (571) 403-2619 for a consultation today.
2. Failure To Disclose and Communicate
Neglecting to tell family members about an estate plan can also prove to be a critical error. While you do not need to divulge all of the details of an estate plan, especially if you have not finalized all of the specifics, your family needs to know that these legal documents exist and represent your wishes.
Secrecy amongst families can create emotional adversaries following the death of a loved one. However, the occasional briefing to family members regarding an estate can create a feeling of inclusion and foster the sense that you have given your beneficiaries' wants and needs proper consideration. For example, one family member may not want the responsibility of managing a property, but another might see it as an opportunity. Additionally, administering the estate is more manageable when family members and other potential heirs know what to expect.
3. Failure to Include Health Directives
Estate planning does not just consist of distributing assets following a person's death. While an estate is, by definition, a collection of assets, a comprehensive estate plan should also include decisions regarding health care and end-of-life care.
Advance directives spell out someone's wishes for medical care when they can no longer represent themselves. The types of decisions included in advance directives include:
- Cardiopulmonary Resuscitation (CPR)
- Tube Feeding
- Do Not Resuscitate (DNR) Orders
- Mechanical Ventilation
- Medications and Antibiotics
- Palliative Care
- Organ and Tissue Donations
According to the American Cancer Society, if no health care directives exist, close family members will need to make these critical health decisions on behalf of their loved one. Such decisions place a substantial burden on family members, especially if they are unsure of your wishes, or there is conflict about your care. Creating legal documents that directly address your health care wishes can help ensure that your preferences are followed.
4. Naming Only One Beneficiary
One of the most important estate planning mistakes to avoid is only naming one beneficiary to an estate. Naming a single beneficiary to an estate or trust can cause numerous problems. The beneficiary could pass before or simultaneously with the estate owner. Naming a contingent beneficiary is essential. Contingent beneficiaries are second in line to inherit an estate's assets if something happens to the primary beneficiary.
5. Failure To Update and Modify an Existing Estate Plan
Failure to update an existing estate plan can lead to chaos if a situation has changed dramatically. For example, an estate can fluctuate with the accumulation or loss of assets, or a divorce or marriage may change how the estate will be distributed. A traditional rule-of-thumb is that estate plans should be examined to determine if they need updates every three to five years or after any significant life events or changes.
6. Creating a DIY Estate Plan
Estate law involves complex laws that can change rapidly. The purpose of an estate plan is to ensure your final wishes are honored and your assets are protected. Failing to have the proper documents correctly executed can result in a landmine of tax and legal consequences that can leave your family heavily burdened. Consider visiting with our legal team at The Law Office of Aubrey Carew Sizer PLLC to ensure your legal and financial wishes are carried out.
7. Failure To Consider Charitable Contributions
Another important estate planning mistake to avoid is the failure to consider giving to a charitable organization as part of an estate plan. Charitable giving can give a boost to an organization or cause close to an estate owner's heart. Philanthropic donations also serve to lower an estate's tax liability. As a result, informed giving can be a crucial component in crafting a comprehensive estate plan.
8. Underestimating the Liquidity of an Estate
With much an estate bound up in property, stock options, or other illiquid investments, beneficiaries might find themselves heavy on assets but light on cash with which to work after a loved one passes away. Therefore, is important to consider leaving part of an estate in liquid assets, such as cash. Another option is to include beneficiaries in a life insurance policy, where a payout can lead to cash-in-hand faster than other types of investments. If you are curious about whether or not your estate plan has enough liquidity, consider contacting an experienced estate planning attorney today.
9. Failure To Consider Digital Assets
Digital assets are becoming more integral to estate planning and generational wealth preservation. Many people have acquired substantial wealth in the form of tech products, such as software, websites, domain names, cryptocurrency, and nonfungible tokens (NFTs). Planning for the transfer of digital assets is critical to ensuring your heirs benefit from your digital assets.
10. Failure To Specify Final Wishes
Many people fail to specifically address where they want to be buried, or, if cremated, where they would like their ashes spread. However, final arrangements can give family members great peace of mind that they have honored a loved one's wishes. Outlining what you would like for final arrangements can help family members honor your final wishes without added stress during a difficult time.
Contact An Experienced Estate Planning Attorney Today
These are just a few of the estate planning mistakes to avoid in order to ensure that your wishes are properly carried out after you pass away. To ensure your legal and financial rights remain protected, and that the process is easier for your loved ones, consider contacting our compassionate and experienced legal team at The Law Office of Aubrey Carew Sizer PLLC at (571) 403-2619 to schedule a consultation today.