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How To Avoid Common Estate Planning Mistakes


Common Estate Planning Mistakes And Identifying How To Avoid ThemEstate Planning Mistakes

You’ll find that most estate planning mistakes usually fall into the same few categories. Each individual estate plan is constructed with unique features that are specific to each situation, yet all plans can fall for the same mistakes. Nevertheless, these common mistakes are avoidable by having expert knowledge of what to look out for.

Struggling To Understand The Plan

It’s not unusual to see people act passive at the thought of an estate planner. They’ll believe that the planner will take care of the everything with no mistakes, making sure that everything they’ll need is taken care of. People will usually sign a legal document even when they’re not 100% sure what they’re signing. A survey revealed, attorneys believe a high percentage of plans that are produced aren’t fully implemented due to the client not understanding and being able to follow the plan.

An important role of an estate planner’s job is to assist their clients with understanding the basics of how their plan works, what the procedure is to implement and maintain the plan and how it will work to benefit you and your loved ones. It is however, also your job to make sure you understand those fundamentals. This doesn’t mean you have to understand how the law works or why specific language is used, as long as you have a basic understanding.

This could mean you arrange a meeting with your planner, so they can walk you through the procedure of your plan. If you decide to arrange a meeting, try make notes of any important decisions and the reason why you made the decision as you’ll be able to refer to these notes in the future.

Outdated Beneficiary Designations

You’ll find that most estate planners will have come across a circumstance like this at least once in their career. Make sure your will states who you want to inherit certain assets as these assents have separate beneficiary designation forms which will determine who will inherit those assents once you pass away. The assets involved may also include any retirement accounts, annuities and any life insurance you might have.

If you fail to update your beneficiary designations, it could mean an asset is given to a parent or sibling due to an outdated instruction from when the plan was first constructed. For example, if your relationship breaks down or someone dies that is featured in your will, you’ll have to update your will to make sure that the asset will still go to someone of your choice.

A way to avoid this situation would be to check your will every few years to make sure everything is still relevant.

Not Updating Powers Of Attorney

Every estate plan that is made should include two powers of attorneys. One for financial matters and one to take care of any medical care.

Unfortunately, not many people will have these documents or if they have, they’ve forgot to keep them up to date. It’s important to have these documents and to keep them up to date.

If you have any questions regarding anything you have read, don’t hesitate to contact us.