06 May How to Avoid Estate Planning Mistakes
You’ve sat down with an attorney, thought through any important decisions and created estate planning documents. You think you’re set for life, but you’re not. While creating estate planning documents is a great first step to financial and legacy planning, your plan is only as secure as it’s written. Avoid common estate planning mistakes by checking all the boxes beyond simply creating documents.
1. Update your documents
Not updating documents is one common estate planning mistake. You should update your estate plan every few years, especially if you’ve experienced any big life changes, such as:
- Marriage or divorce
- Having a child
- Gaining or losing a significant amount of funds
Updating your documents accordingly enables you to accurately reflect your wishes and take care of what matters most to you.
2. Double check beneficiaries
Beneficiary designations trip people up often. A beneficiary is a person who you list to receive an asset when you die. You designate a beneficiary on many documents, including life insurance forms and retirement accounts. Using beneficiary designations is important, but make sure you don’t designate a beneficiary on an asset, then list the asset in your will as going to someone else. The person who you listed as a beneficiary will receive the asset. However, the person you listed in your will won’t because beneficiary designations always take priority. Double check your designations to correctly reflect your wishes.
3. Don’t assume the best of people
While you like to think the best of your family and friends, sometimes they fall short of expectations. That’s especially true if you’re asking a lot of someone. Relying on another person to carry out tasks when you are unable to do them yourself is a key estate planning component. Many documents, including your powers of attorney, require you to name someone to help you if needed. It’s important to talk to each candidate you have in mind for roles in your estate plan. That way, you can see if your people are willing to take on a specific role. If they say no, you then have time to find another willing individual.
It seems as though everyone should say yes at first glance. However, asking someone to potentially be a legal guardian to your minor children or to make financial decisions on your behalf is a big ask. You want to ensure your candidates are up to the challenge.
How can Boyum Law Firm help you?
Boyum Law Firm can help with your estate planning, Medicaid planning and probate law needs. To contact Boyum Law Firm, click here.