Estate Planning: What Mistakes You Should Avoid

Estate Planning: What Mistakes You Should Avoid

National Estate Planning Awareness Week is October 21-27, 2019, and if you do not have a recent estate plan, now is the time to create one. The National Association of Estate Planners and Councils (NAEPC) reports approximately 56% of Americans do not have a current estate plan. Often, people who do not have one believe that all assets will pass on to their relatives at death. Yet, this is not always the case, and with an estate plan, not only will your wishes at death be clear for others, but you will also be able to manage your assets to plan for lifetime financial stability. 

Consider estate planning as a method of ensuring you have what you need to retire as well as if you become incapacitated. Also, with an estate plan, your loved ones will receive what you would like them to have after your death. There are many mistakes you can avoid, and the worst one is not having an up-to-date estate plan. Other mistakes to avoid include:

  • Creating a plan you do not understand
  • Failing to update beneficiaries and assets
  • Forgetting to update or add a power of attorney

Even the most knowledgeable individuals can become confused with a complicated estate plan. In many cases, estate plans are not fully implemented because people do not understand all parts of the plan or what to do with it after it is created. While your estate planner needs to make sure you understand the plan, you also need to ask questions to make sure you know what to do to implement it successfully.

Choosing beneficiaries is an essential part of estate planning, and throughout your life, your beneficiaries may change due to death, divorce, or other reasons. Consider your retirement accounts and whether you have updated the beneficiary recently. A typical example is when a couple divorces, and one of the spouses forgets to change the beneficiary on a retirement account. You might also have a situation where someone was born into the family, and you forget to include them in your estate plan. 

Similarly, consider what assets you have acquired in your lifetime. If you do not have a current plan, you cannot be sure that the family members you want to leave these assets to will receive them. 

Choosing the right type of power of attorney is another crucial part of estate planning. There are several types of powers of attorney which include a general durable power of attorney, which grants someone else to make financial and other decisions on your behalf, healthcare power of attorney which permits a person to make decisions for you regarding healthcare, and limited power of attorney which allows someone to make decisions for you in particular situations like buying a home. 

With so much at stake, making sure you have a current estate plan can help you make the best decisions for your financial stability and for continuing your legacy. Contact the experienced attorneys at Bratton Law today to put a plan in place.