The process of estate planning can vary in complexity, even at the best of times, depending on the nature of your assets and who your intended beneficiaries are. That is why planning your estate with a lawyer is essential to avoid legal problems down the line. Here are five estate planning mistakes you should be careful to avoid:
- Failing to ensure you account for all of your assets
- It is vital for estate planning purposes to have good records of your assets. This not only includes things like your home, car, or important valuables, but also things like bank accounts, business assets, and insurance policy documents. Without a clear idea of what these assets are or how to access them, it makes it more difficult to craft the most effective estate plan that will allow your wishes to be met, as well as minimizing or eliminating any tax obligations to the extent possible.
- Failing to put advance directives into place
- Estate planning isn’t just about planning for what happens after you die. It is also about ensuring you will be taken care of when you get older, using advance directives like a power of attorney and a healthcare proxy. If you don’t have either of these documents in place, you risk facing difficulties in having your bills paid and your medical needs met if you become unable to care for yourself, especially if your next of kin are likely to dispute who should be in “control” over your affairs. Having a power of attorney and healthcare proxy also ensures you have made your wishes known in writing as to which person you trust the most to ensure you are properly taken care of if and when you can no longer do so yourself.
- Failing to plan for a potential dispute
- Disputes over wills, trusts, and other estate planning documents are more common than most people realize. Sometimes they are the result of legitimate concerns, and other times they are the result of family members wanting to air grievances they have perceived for many years. Either way, having a Will ensures that you have made your wishes known in writing. Additionally, having your Will prepared by an attorney gives you three people, the attorney and two witnesses, who can vouch that you were competent and the Will accurately reflects your wishes for how you want your estate to be distributed. When your Will is prepared by someone who is not a lawyer, such as a form downloaded from the internet, this opens the door for other family members to more easily claim you were not competent or that your Will does not accurately state your own wishes.
- Failing to account for tax issues
- If you have a large or complex estate, you may run afoul of tax issues like the estate tax, inheritance tax or the gift tax. Failing to properly plan for the distribution of your assets can result in significant reductions in how much money your loved ones will inherit when you pass away. Proper estate planning can help mitigate some or all of this tax burden, ensuring your assets pass on to your loved ones as you intend.
- Failing to update your estate plan over time
- People’s needs and wants can change over time, and that is just as true for estate planning as it is for anything else. That is why you should make sure to periodically update your estate plan, so it accurately reflects your wishes and accounts for changes in your family situation, such as a marriage or births of children that occur after you made your earlier estate planning documents. This also ensures your estate plan accurately reflects the state of your personal assets, avoiding potential confusion from issues like the will trying to pass on property you no longer own or ensuring proper tax planning as your assets grow. Periodically consulting with an estate planning attorney also will keep you up to date with any applicable changes in the law.
The attorneys at the Law Offices of Hunziker, Champion, Romer & Miller understand that the aging population has specific and diverse needs. The firm helps seniors and their families by handling all aspects of elder law including guardianships, end of life planning, asset preservation, Medicaid planning, and trusts and estates issues. If you need to consult on elder law issues, call The Law Offices of Hunziker, Champion, Romer & Miller at (973) 256-0456 or fill out our contact form for a consultation.
