6 Estate Planning Mistakes to Avoid

Estate planning is an important process that leaves you can your loved ones and concerned parties with a collection of documents that outline your wishes and decisions about your assets and personal choices.

An estate plan typically includes a collection of the following:

  • Will/trust
  • Durable power of attorney
  • Beneficiary designations
  • Letter of intent
  • Healthcare power of attorney
  • Guardianship designations

6 Estate Planning Mistakes to Avoid

Every estate plan is unique to those it pertains to and assists. A person can start out with a perfectly correct document only to find there are several mistakes common to most all estate plans. These classic mistakes are avoidable if you know what issues to look for and how to get started mistake-proofing your estate plan with some smart planning with your estate planning attorney. Most estate plans have several common elements. You should be aware of the tools in your arsenal and how they work for you.

  • Confusion About the Plan: When a person hires an estate planner, it’s easy to sit back and let the professional take control of the situation. When you are involved in the creation of your estate plan, it’s easy to make mistakes in its execution. It’s hard to execute the details of something you don’t understand. This isn’t a mistake as it’s a misunderstanding. One of the top reasons estate plans don’t work for some families is from a failure of implementation.
  • Old or Outdated Information: Time changes everything, and the choices you make for your estate plan today may change in a decade. You should set an alert or plan with your advisor for periodic checks to your plan to ensure that all your beneficiaries are still correct and that your executor is still a viable candidate for the role. Your estate plan sounds formal and ridged, but it’s not, and you should feel comfortable making changes as needed.
  • Powers of Attorney Issues: An advanced medical directive may be one of the more importance tools in your estate plan because you’re more likely to need it and use it before other parts of your plan. Your powers of attorney, specifically one financial and the other medical. Check your records to ensure you have both documents, and if you do, then verify that all information is current.
  • Failing to Perform Update: Your estate plan is just that, a plan. As long as you’re alive and not deceased, the details of your estate plan become old, outdated, or worse yet – inaccurate. Have their marriages and divorces? Births and deaths? Life continues moving, which means your plan can’t be a static document you have written and then put on a shelf until needed. It should be updated and periodically checked for inaccuracies and expanded to incorporate any changes to your life.
  • Tax Issues and Changes: Tax cuts and other legal changes impact the feasibility and effectiveness of your estate plan. Depending on your situation, you will need to periodically review your plan to make sure your asset designations and retirement accounts are correctly named within your document. You wouldn’t want to create a tax liability or miss out on an opportunity to take full advantage of your estate plan.
  • Failing to Follow Through: When your estate plan is created, most of the important work is completed on your behalf. However, there are important aspects that you may need to finalize or follow through on later. For example, if you have a living trust, you have to transfer assets into the trust. Many assets can be transferred by simply stating so in the trust document, but other assets like vehicles, homes, or bank accounts require more steps and documentation. This failure to follow through can render your estate plan ineffective.

At Samra Dhillon & Associates, we have family law attorneys on staff who can help you develop a strategy for your unique situation. Call us today at (916) 571-1550 to schedule a consultation.