Despite all the best efforts, your estate plan might fail. All estate plans are unique, but if they fail, we often find they tend to fail for the same reasons. As long as you know what to be careful of and commit to working with an estate planning attorney you trust who can advise you on potential issues, however, almost all of these mistakes are avoidable.
Let us start by sharing some of the most common estate planning mistakes we see when our potential clients, who perhaps never had an estate plan or are planning for the first time, come to our office for an initial meeting.
1. Not understanding how your plan works. While you may not need to know all the legal terms contained within your estate plan, you should have a good understanding of the decisions you have made. There can be a lot to take in. We always advise you to both ask your questions in your meeting, no matter how irrelevant they may seem to you, and to take notes so you have a point of reference when you leave the office.
2. Outdated beneficiary designations. Beneficiary designations have little to do with your last will and testament, although they can be more relevant when you have a trust-based estate plan. These are the people you have named in your insurance policies, retirement accounts, annuities, and so on. We suggest reviewing and updating your beneficiaries every couple of years and talk to your estate planning attorney to ensure you are not thwarting your goals.
3. Outdated asset ownership. Much like beneficiary designations, your assets should be reviewed to make sure the arrangements are in line with your wishes. Review your assets and plan with your lawyer periodically to be sure your choices do not add unnecessary costs or complexities.
4. Failure to fund your trust agreements. Too often, trusts of all kinds are created, prepared, and signed, but the assets and titles that are meant to fund them are not transferred. For some assets, funding the trust is simple, while others are a bit more complicated. Work with your attorney to ensure your plan is fully funded and maintained at all times.
5. Not updating powers of attorney. Your estate plan should include two powers of attorney, one for your financial affairs and one for health care coverage. Further, they should be in place well before you need them. Do not wait to talk to your estate planning attorney in regard to choosing the right agent for each role within your estate plan.
The most prevalent common thread among all of these estate planning mistakes is the failure to review. Working with a lawyer ensures your estate plan reflects your wishes and does not result in any unnecessary cost or aggravation for your beneficiaries. Do not wait to form a relationship with a local, experienced estate planning attorney who can help you reach your goals for yourself, your family, and your loved ones. We encourage you to contact our office to schedule a meeting.