There are a number of common estate planning errors that we see people make. These errors occur in almost equal proportion among the wealthiest as well as individuals of modest means.
In the hopes of making the estate planning process more efficient for everyone, this article reviews some of the most common mistakes made by people during the estate plan.
# 1 – Not Having an Estate Plan
It might sound redundant, but it is important for every person to have an estate plan. This is true regardless of the size of a person’s estate. Despite this commonly cited piece of advise, statistics reveal that over half of the people in the United States do not have even a will.
There are numerous well known individuals including Abraham Lincoln and Martin Luther King Junior who died without any estate plans.
While matters are sometimes resolved peacefully following a person’s death, other times these decisions can lead to bitter disagreements. As a result, for most people, it is critical that they have an estate plan.
# 2 – Not Creating Healthcare Associated Documents
If a person lacks the appropriate healthcare planning document and a medical emergency occurs, a person’s family will be left with the challenge of deciding what decision the incapcitated individual would like made.
Some of the important healthcare planning documents that you should consider writing include:
- Durable power of attorney, which addresses issues of incapacity
- Medical power of attorney, which appoints an individual who will make health care decisions for you if you are no longer able to make them
- HIPAA authorization, which allows an appointed entity to share certain treatments regarding diagnosis and medical treatment to another person
# 3 – Failure to Update Beneficiary Designations
If a person properly handles beneficiary designations, their assets will pass to loved ones without the need for probate. In nearly all cases, this means making sure that any account with a beneficiary has the proper designation.
Failure to designate a beneficiary can result in a number of undesirable consequences.
# 4 – Select Appropriate Insurance
Insurance is an area of estate planning where people commonly encounter challenges. Unfortunately, insurance can play an invaluable role if a family is dependent on the deceased individual’s income.
If your family is financially dependent on you, it is a wise idea to consider the possibility of life insurance or long-term disability insurance.
# 5 – Avoid Procrastination
Many of us live hectic lives. Unfortunately, no matter what life obstacles are currently in the way, it is still important to engage in estate planning to make sure that your loved ones are left in the best possible situation if something happens to you.
It could be just as bad if you create an estate plan, but fail to disclose details about it to your loved ones.
Speak with an Experienced Estate Planning Lawyer
There are a number of obstacles that can occur during the estate planning process. To avoid as many of these potential hurdles as possible, it can be helpful to retain the assistance of an experienced attorney.
Contact Ettinger Estate Planning today to schedule a free initial consultation.