Estate planning is a very important process that should not be taken lightly as improper planning can cause tension and stress between family members after you pass away.
Unfortunately, even the best intended estate plans may still lead to disputes after you’re gone due to mistakes made in the estate plan. There are many different considerations to make when creating your estate plan and it can be easy to make a mistake.
Individuals and families creating an estate plan or those who already have an estate plan should be aware of common estate planning mistakes and take steps to fix them before it’s too late.
What are the most common estate planning mistakes? Some of the most common errors are listed below.
Failing to address and plan for estate taxes is a very common mistake. Creating a trust or giving gifts to heirs can help address some issues with estate taxes. Estate taxes can be difficult to plan for, which is why it is important to consult an estate planning attorney.
Another common mistake is choosing the wrong executor for your estate plan. Do not choose someone to be the executor of your will and other estate planning documents if they have a conflict of interest. It may be best to choose someone who will be unbiased instead of a relative who is also a beneficiary.
Financial documents should be organized with notes on how and where to access each account. Many estate plans fail to organize their financial documents and family members have a difficult time gaining access to these accounts and may not even know that some financial accounts exist.
Failing to update estate plans is a very common mistake and can lead to many disputes in the future. Any time there is a change to the family through marriage, divorce, death and new children, the estate plan should be reviewed and updated as necessary. If estate plans are not updated, an ex spouse could still be a beneficiary in the estate plan and cause disputes and hurt feelings after your death.
There are many other types of estate planning mistakes that individuals should be aware of. Individuals should consult an estate planning attorney to create or review their estate plan to make sure their estate plan is accurate and up to date.
Source: US News, ” Estate Planning Lessons From James Gandolfini ,” Kimberly Palmer, July 16, 2013