Most people understand that planning for the future is important for several reasons. In many cases, those considering an estate plan want to mitigate potential health/life risks as they grow older and provide for their families and loved ones after they are gone. Unfortunately, many people never make an estate plan or even draw up a Last Will and Testament (will). However, there are some common estate planning mistakes that are often made. These mistakes can have a significant impact on how assets, property, heirlooms, insurance policies, and other matters are handled upon death. Those who need legal guidance or further information regarding estate planning may want to consider visiting with The Law Office of Aubrey Carew Sizer, PLLC at (571)-403-2619 to learn more.
What Is an Estate Plan?
Many people mistakenly think estate planning is for the wealthy, however everyone has an estate. An estate may consist of a home, property, vehicles, life insurance policies, checking accounts, jewelry, even furniture and other personal items. When a person dies without an estate plan, the distribution of the estate will be decided by the court. Estate planning is simply planning in advance who will inherit your assets and other property upon your passing. Family, friends, and even charities may receive the property that is designated to them, with a minimum of court costs, legal fees, taxes, and other costs.
Mistakes to Avoid
Spouses who are married often believe that upon one of their deaths, the surviving spouse will inherit all assets and property. This is not necessarily true. Even couples who are not married often want to pass on their estate to their partners upon their death. Some of the most common estate planning mistakes often made include:
Not Having a Will
According to the American Bar Association, the laws of each state govern who receives property when someone dies without a will (intestate). Property and assets may be divided among children or other family members any way the state sees fit. This often results in family disputes and family members becoming estranged.
Do-It-Yourself Wills and Trusts
There are countless will and trust forms that can be downloaded online, but a do-it-yourself approach is not generally a good idea when it comes to what you value most - the future of family and loved ones. Depending on the circumstances, there are specific strategies that may be necessary to creating a solid estate plan. Working with a skilled and knowledgeable estate planning attorney can help ensure no mistakes are made that could result in documents being worthless. Consider visiting with the experienced estate planning attorneys at The Law Office of Aubrey Carew Sizer, PLLC to learn more about ensuring your legal rights remain protected within your estate plan.
Not Understanding Your Estate Plan
Unfortunately, people sign documents in a regular basis that they do not fully understand. It is no different with estate planning. In fact, only about 10% of those who sign documents actually read conditions and legal terms. It is critical for an estate plan to accomplish the goals and wishes of the testator (person creating the will/trust). A seasoned estate planning lawyer can explain anything that is not clear and answer questions to ensure all the language is clearly understood.
Failing to Update an Estate Plan
Things change in our lives that can have an astronomical impact on an estate plan. Marriage, business startups, death, retirement, divorce - the list is lengthy. Tax laws may change, a family business may be sold, or there may be a new child or stepchildren in the mix. Any and all of these events are reasons to review an estate plan and update it when necessary.
Failing to Plan for Long-Term Care or Disability
People often fail to consider what would happen if they were to become disabled or need long-term care. According to the Administration for Community Living, about seven of 10 people who are 65 today will need some form of long-term care in the future, whether it be in a nursing home or assisted living facility, or in-home care. Considering the costs can be as high as $100,000 per year, planning for long-term care and disability is critical.
Not Funding a Living Trust
A living or revocable trust is an estate planning tool that helps families avoid the time and expense of probate upon a loved one's death. This type of trust also ensures that information regarding beneficiaries, assets, and other details are not made public for anyone to see. Many people include revocable trusts in their estate plans but fail to fund them. Reviewing assets to determine which should be retitled is something that should be done regularly, along with transferring the assets to the trust. A revocable trust that is not funded during their lifetime is one of the most common estate planning mistakes people make.
Not Including Advance Directives
No one expects to become incapacitated, but it does happen. Someone may be in a coma following a serious accident or placed on life support. Advanced directives such as financial or health care powers of attorney give the individual named to act on your behalf the authority to make critical and sometimes life-and-death decisions. Some people do not want to be left on life support or to be resuscitated. By having someone that is completely trusted as a financial or health care power of attorney these matters can be handled without family members and loved ones having to make tough decisions or petition to the court, which can be costly.
Schedule a Consultation with an Experienced Estate Planning Attorney Today
There is often much more to estate planning than most people consider. While it is always recommended that individuals have a will at the very minimum, there are many other considerations that should be taken into account. Retirement accounts, digital assets, marriage, divorce, real estate, wealth, family businesses or private practices – there are so many factors that determine what should be in a comprehensive estate plan. Those who want to avoid estate planning mistakes and ensure their loved ones' futures may want to consider scheduling a consultation with The Law Office of Aubrey Carew Sizer, PLLC at (571)-403-2619 to learn how to protect your legal and financial rights.
