Creating an estate plan is an essential step in safeguarding your assets and ensuring your loved ones are protected. However, even with the best intentions, simple mistakes can have significant consequences and potentially derail your estate plan. In this article, we will explore three common errors that individuals make and provide insights on how to avoid them.
Failure to Update Your Estate Plan:
One of the most common mistakes people make is neglecting to update their estate plan regularly. Life is dynamic, and circumstances change over time. Births, deaths, marriages, divorces, and new acquisitions can all impact your estate plan. Failing to review and update your plan can lead to outdated provisions that may not accurately reflect your current wishes. To avoid this, it is crucial to schedule periodic check-ups with an estate planning attorney to ensure your plan remains up to date.
Overlooking Beneficiary Designations:
Many assets, such as retirement accounts, life insurance policies, and payable-on-death (POD) accounts, allow you to designate beneficiaries. Unfortunately, individuals often forget to review and update these beneficiary designations. Failing to update beneficiaries can result in unintended consequences, such as leaving assets to ex-spouses or deceased individuals. To avoid this mistake, make it a habit to periodically review and update your beneficiary designations to ensure they align with your current intentions.
Not Planning for Incapacity:
While estate planning commonly focuses on what happens after your passing, it is equally important to plan for potential incapacity during your lifetime. Failing to include provisions for incapacity can lead to confusion, family disputes, and court-appointed guardianships. To prevent this, consider including documents such as a durable power of attorney and a healthcare proxy in your estate plan. These documents designate individuals who will make financial and medical decisions on your behalf if you become incapacitated.
To conclude, properly executing an estate plan requires careful attention to detail and ongoing review. By avoiding these simple yet significant mistakes, you can ensure that your estate plan remains effective and aligned with your wishes. Remember to regularly update your plan, review beneficiary designations, and plan for potential incapacity. Consulting with an experienced estate planning attorney can provide invaluable guidance and help you navigate these complexities, ultimately securing the future of your assets and loved ones.
At Legacy Counsel, we help you with estate planning to protect your assets and fulfill your wishes after you pass away. Proper estate planning will ensure that your loved ones are cared for and that your legacy lives on. If you want to know more about this, schedule a Legacy Session here.
