12 Estate Planning Mistakes That You Must Avoid
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Originally Posted On: https://shreveportlawyers.net/12-estate-planning-mistakes-that-you-must-avoid/
After you have decided to create an estate plan to ensure your property is distributed in accordance with your wishes, it should give you peace of mind and avoid problems for your loved ones. However, you need to bear in mind that you can’t make mistakes when estate planning.
Each estate plan is unique. However, there are some common estate planning mistakes that people should avoid.
- Waiting until it is too late to create a will. Creating a will is not something you have at the top of the things you want to do. You probably don’t want to think about dying. But accidents can happen and your health could change at any moment. So, you can choose to prepare to care for your spouse, children, and any other loved ones in case of an unexpected event.
- Failure to update your will after major life events. A plan for your estate is more than a once-off activity. It is possible that your estate plan will need to be reviewed periodically in order to reflect significant life events such as a loved one’s death, marriages, children’s birth or adoptions, newly acquired property, or major changes in assets.
- Not planning to provide for heirs with disabilities. Special estate planning tools, such as a spendthrift trust, may be useful if you are planning to provide for a child or heir who cannot manage their money.
- Appointing an executor who isn’t qualified. An executor should be trustworthy and willing to fulfill their fiduciary responsibility. Make sure you don’t choose someone who is not qualified.
- Failure to fund a trust. For any estate plan to be effective, living trusts or revocable trusts must be financed. Failure to transfer property ownership or assets to the trust will result in the property or assets being passed to probate, rather than being distributed from the trust.
- Failure to consider the different types of trusts. Different trusts may have different tax implications. They can also serve your heirs in various ways.
- Naming a single beneficiary. If the beneficiary you named dies before you, your property might not pass as you wish.
- Do not forget about your digital assets. What happens to your social media accounts? These things might not be of any financial value to your heirs, but it may be necessary to protect them after your death.
- Not understanding your plan. Estate plans can be complicated. An experienced estate planning lawyer can help you to understand your plan and the consequences of your decisions.
- Do not tell anyone where to find your will or other estate planning documents. For example, you may keep the documents in a safe that is fireproof in your home so no one else can see them.
- Creating an estate plan on your own. Louisiana law allows you to use many different estate planning tools. However, if you don’t consult an experienced estate planning attorney, you might make a mistake.
- Not planning for your own incapacity and disability. The essential components of an estate plan include medical and healthcare powers of attorney, advance directives, disability insurance, and medical and healthcare powers. These documents and insurance are essential if you are unable to make financial decisions, take care of your financial obligations, or earn an income.
Everybody needs an estate plan regardless of the size of their estate. Settlement becomes more difficult when an estate plan is not prepared.
A checklist for creating an estate planning plan is the first step. This checklist will allow you to decide what type of estate plan best suits your needs, reducing the time it takes to create an estate plan.
Estate Planning Basics
First, take inventory of the estate to create an estate planning checklist. Everything that someone owns, regardless of its value, is considered part of their estate. It is a myth that estate plans are only about money. The first step in determining the type of estate plan that is best to protect your estate is to inventory what you own.
An inventory of an estate should include the list of assets owned by the couple or individual. Consider things like homes, cars, and jewelry. Next, gather any recent statements from banks or investment accounts. Next, you should include in the inventory life insurance policies. This will indicate their cash value as well as death beneficiaries. The inventory should be a complete list of all debts including mortgages. This inventory will provide a comprehensive picture of the estate and will help determine the best estate plan to achieve the estate owner’s goals.
Estate Planning Documents Checklist
Once you have created a complete inventory, the next step is to identify the best estate planning documents to protect and distribute your estate assets. These forms are crucial to any estate planning checklist.
There are some questions that must be asked to determine whether a trust or a will achieves the objectives of its owner. Is this person concerned about privacy and wants to avoid probate? If either answer is true, then trusts should be used. A trust would be appropriate if the answer is yes. Finally, is the estate owner wishing for their beneficiaries to inherit their estate outright or would they prefer that their beneficiaries receive periodic disbursements? A trust is needed if periodic disbursements need to be made.
Ancillary documents are part of any trust-based or will-based estate planning. One document is the durable power of attorney. This document designates an agent, the person chosen by the principal to handle financial matters in the event that the principal, who created the durable power of attorney becomes incapacitated. This document is very useful and does not require a conservator or guardian.
In any estate plan, a power of attorney for healthcare should be included. This document allows an agent to make healthcare decisions on behalf of the principal in case they become incapacitated.
A living will should be included in every estate plan. This document is also known as a healthcare directive. This document describes the actions to be taken when someone becomes incapacitated or is incompetent.
An estate planning lawyer can help you prevent mistakes and protect your family
You don’t have to know everything. All you need is to be able to tell your loved ones that you want to preserve their assets and have control over how your property will go. You can trust the Louisiana experienced estate planning lawyers at Bowie & Beresko to help you every step of the way. We will help you create the right plan. For more information, call us today at 318-221-0600 or contact us through this website.