Top Estate Planning Mistakes
Planning the preservation of your hard-earned wealth and assets is essential. By that same token, estate planning can be extraordinarily complex because you must establish who gets what and when after you die. If you become incapacitated, your estate plan must include clear, comprehensive instructions as to who does what and when. Given these nuances, you must ensure your estate plan leaves no stone unturned, as one small flaw could have mighty consequences.
For these reasons and more, we explain some of the most common mistakes in estate planning. In his years of experience, our attorney has witnessed firsthand the devastating effects of poor estate planning. Surviving family members of the deceased must pick up the pieces as a result, which is a heavy burden to bear considering they are mourning the loss of their loved one. To better avoid these impacts, we encourage you to take a look at the 11 common estate planning mistakes below:
Lack of healthcare and disability planning: Most people die in hospitals or other institutions. Before that happens, patients often become incapacitated to the extent that they are unable to communicate their healthcare needs. When this happens, Advance Directives and a Healthcare Power of Attorney will identify decision-makers named in the healthcare proxy, specify the patient’s wishes for end-of-life care, and establish a formal plan to manage financial and property matters concerning the patient.
No will or estate plan: Lacking a will or an estate plan means your surviving family members may have to probate your will in court, which can take months or even years to complete after your death. They are already grieving your loss, so going through probate court can have substantial emotional and financial costs to your family.
No plan for digital assets: Don’t forget to plan for the administration of your digital assets and social media, or else you could lose important documents, photos, and family records as a result.
Poor planning for your children: Failing to consider the possibility that your children could get divorced and/or sued could have costly outcomes. It’s not fun to think about, but if your children get divorced or sued after your death, their inheritance may end up in the wrong hands. As such, our attorney can help protect and preserve your legacy and children’s inheritance by establishing a trust on your behalf.
No mention of family values: An often overlooked element of estate planning is transferring family values. People often focus on their tangible, dollar-value assets in estate planning, but family values are priceless. That said, your estate plan should address family meetings, include a family mission statement, and provide custom planning for your children.
Wasted IRA funds: Many times, individual retirement account (IRA) beneficiaries receive a decedent’s account funds in a lump sum. For this reason, beneficiaries are often slapped with high tax bills, which could best be prevented by creating a standalone retirement trust, known as an “IRA trust.” By doing this, you can protect your IRA funds while providing for your beneficiaries.
Poor record-keeping: Comprehensive estate planning is key to helping your heirs avoid confusion in the future, as it provides a framework for preserving your legal and financial records. The last thing you want is for your heirs to spend months or even years making sense of what you left behind, which is why strong planning is essential.
Issues with creditors and predators: If your surviving spouse remarries but then gets divorced, your estate could end up in the wrong hands, just like it would if you don’t plan for the potential that your children get divorced or sued (mentioned before). There’s a good chance that financial predators could target and victimize your surviving spouse, which has become a common occurrence as the population ages. If and when this happens, your legacy may be lost. However,
Family fights: Sentimental items are often the subject of family fights. It is common for family members to disagree over who gets to have those invaluable items absent the proper estate planning documents. To avoid these fights, you should create a Personal Property Memorandum to account for tangible items like artwork, family heirlooms, and jewelry. Don’t make the mistake of focusing solely on financial assets in your estate plan, as family valuables should also be a priority.
No access to medical records: If you become incapacitated and can no longer communicate your healthcare needs, your family must have access to your medical records. To give them access, you must execute a HIPAA authorization in your estate plan to ensure your family members, including your spouse, get access to your medical information.
Outdated estate plan: Over time, your wishes, priorities, and family dynamics may change. This is normal, but you must update your estate plan accordingly. When you retain an estate planning lawyer, they can conduct a comprehensive review of your estate plan and update it to reflect your current circumstances, needs, and goals.
Effective Estate Planning Starts Here
At Jason M. Tyra, PLLC, our attorney helps clients plan their legacy the right way. We provide personalized legal solutions that are tailored to suit our clients’ unique goals, objectives, and family dynamics. We ask questions that clients otherwise would not have considered firsthand to ensure they thoroughly understand their options and potential impacts. At our firm, no stone is left unturned.
To learn more about how we can help preserve your wealth and assets, contact us online or at (972) 737-4456.