Estate planning mistakes can often confuse people when they don’t know which path should be taken. Your estate plan will likely be among the most important projects you undertake over the course of your lifetime. Ideally, your estate plan should protect and provide for you, your assets, and your loved ones, both while you are alive and after you are gone. Avoiding mistakes during the creation of your estate plan, therefore, is crucial. The best way to do that is to work closely with an experienced estate planning attorney. In the meantime, however, the Long Island estate planning attorneys at Eghrari Wealth Training Firm explain some common estate planning mistakes you should avoid making.
Thinking You Do Not Need a Plan
The idea that you need to reach a certain point in your life, or you need to achieve a certain material success before needing an estate plan is a very common mistake. While it is true that as your family and your estate grow, you will need to build on your basic estate plan to accommodate that growth, every adult should have at least a basic estate plan in place. A basic plan, however, prevents you from leaving behind an intestate estate should something happen to you. It also allows you to decide who will oversee the probate of your estate and provides you with the only official opportunity to let a judge know who you would want to be the guardian for your minor children if one is ever needed. Do not put off creating your estate plan because you think you do not need one.
Not Planning for the Possibility of Incapacity
Incapacity is not limited to old age. You stand a one in five chance of suffering a period of disability lasting five month or more prior to reaching retirement age. If you do suffer a period of incapacity, who will make personal and healthcare decisions for you? Who will take over control of your assets and finances? Absent an incapacity plan, a judge may be the one answering those questions – and you may not like the answers. The way to avoid that outcome is to incorporate an incapacity planning component into your comprehensive estate plan.
Estate Planning Mistakes: Going It Alone
In today’s electronic age, it is tempting to turn to the internet for everything, including legal forms. It may seem as though you are saving both time and money using a DIY Will form that you find online. You are more likely to cost your loved ones considerably more time and money than you save when it comes time to probate that Will. DIY Wills are notorious for failing to completely distribute an estate, being outdated and lacking state specific laws, and failing to interact properly with other estate planning documents.
Appointing the Wrong Fiduciaries
The Executor of your estate, the Trustee of a trust, and an Agent in a Power of Attorney are all examples of fiduciary positions within your estate plan. While your initial thought may be to appoint a spouse, friend, or family member to one of these positions based solely on the fact that you trust that person, take some time to think about the duties and responsibilities of the position before making your final choice. Fiduciary positions often require legal and financial knowledge and experience that a spouse/friend/family member doesn’t have, making them a poor choice for the position after careful thought.
Forgetting to Review Your Estate Plan
Just as your life does not remain static, neither should your estate plan. As you grow and change, so should your plan. During your working years you should routinely review and revise your estate plan every three to five years. Once you retire you can stretch that to every five to eight years. Certain life events also call for a more immediate revision of your estate plan. Marriage or divorce, for example, should prompt an immediate update to your plan as should things such as retirement, a move to a new state, the birth of a child, or the death of a fiduciary. If you are uncertain whether a change in your life requires a revision to your estate plan, check with your estate planning attorney to be sure your plan remains up to date.
Contact Our Long Island Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding estate planning, or you are ready to get started with your estate plan, contact the Long Island estate planning attorneys at Eghrari Wealth Training Firm by calling us at 631-265-0599 to schedule your appointment.