Estate planning is a process that can be hard to start. Many Californians intend to prepare estate plans, only to push it off for as long as they can. There are many reasons people do this, but one is that it can be hard to think about what will happen when they are no longer alive.
However, not creating an estate plan and then suffering an unexpected death, illness, or injury can be a recipe for legal trouble. This post will identify five common mistakes individuals make with regard to their estate plans, how simple solutions can help keep them on track. No one who reads this post should interpret its contents as legal advice, but all readers with questions about this post can speak with their local estate planning attorneys for guidance.
Mistake #1: No estate plan
As mentioned, a big mistake in estate planning is not having an estate plan. Without an estate plan, a person may not have a mechanism for sharing how and to whom they want their assets passed when they die. They may not leave instructions for how their minor children should be cared for or who may make decisions for them if they become incapacitated. Not having an estate plan leaves a lot up to chance, which may not be best for all individuals.
Mistake #2: Not considering tax consequences
High value estates can be taxed when a person dies. However, there are estate planning strategies that can reduce the size of an estate so that it is not taxed. If a person does not plan, they cannot avoid otherwise avoidable costs.
Mistake #3: Not changing an estate plan
An estate plan should be fluid because people experience change in their lives. For example, when a Minnesota resident goes through a divorce, they may no longer want their ex to benefit from their estate. Estate plan updates may be necessary after divorces, marriages, deaths, and births of family members.
Mistake #4: Not picking a good administrator
When a person dies, an administrator will become an important person in the completion of the decedent’s end of life financial and legal matters. They will oversee probate and other processes necessary to settle the decedent’s affairs. The wrong administrator can mean trouble, delays, and costs for an estate that should be distributed to beneficiaries.
Mistake #5: Not using an attorney for estate planning matters
It can be tempting to try to prepare estate planning documents like wills and powers of attorney on one’s own. However, mistakes in these documents can lead to their invalidation. If a person’s testamentary documents are not accurate and properly executed, they may not serve their intended purposes when the individual dies. Estate planning attorneys are the right professionals to help men and women who are ready to prepare their estate plans.