Trying to create an estate plan is a lot like do-it-yourself dentistry. It just doesn’t work.
There are people who think that creating an estate plan is something they can tackle. After all, there’s plenty of information on the web, including templates for important provisions. The cost of cleaning up after you pass, will be long remembered and not appreciated by your heirs.
Modern Medicine’s article “Estate planning: Don’t make these mistakes” says that, in some instances, folks try to create their estate plan without consulting an experienced lawyer. These folks think that because they may have a general understanding of estate planning, they can do it for themselves without the help of an estate planning lawyer. But everyone’s different, and boilerplate forms won’t always cover a specific situation. Take a look at this list of potential estate planning mistakes that you can help to avoid by working with an experienced attorney.
Failing to update your estate plan. Your life and financial circumstances may change over time. As a result, you need to change your estate plan accordingly. You should also make sure to review your plan regularly.
Failing to revise your will. The will that you drafted 15 years ago may no longer apply for a variety of reasons. You can’t just cross-out provisions or names on an old will, add or change information, and initial the document. That won’t work and could revoke the entire will. You need to see an estate planning attorney.
Failing to use more than joint tenancy to avoid probate. Many assets are transferred outside of wills, like assets titled in joint tenancy that pass to the surviving joint tenant, not under your will. Remember this only avoids probate on the first death. When the surviving spouse dies, the home will usually end up going through probate.
Failing to coordinate the will and trust. If you have a will and a trust, you must ensure that the documents are aligned so your wishes will ultimately be carried out. If you don’t, there will be delays and unnecessary expenses.
Failing to title assets correctly. You want your primary residence, vacation home, bank accounts, brokerage accounts, retirement accounts and vehicles to be passed on to the persons you designate. Therefore, be certain to keep beneficiary designations up-to-date and to properly title accounts.
Failing to name successor or contingent beneficiaries. If you don't update a beneficiary designation after a beneficiary dies, there’ll be no successor to receive those assets when you die. You should name more than one beneficiary on your accounts and keep your designations up to date.
Failing to name a person to make health care decisions. Designate someone that you trust to follow your wishes as far as your healthcare decisions in the event you are incapacitated. Depending on the state, this may be called a living will, a medical directive, a health care proxy or an advance health care directive.
Failing to update outdated financial powers of attorney. If you chose a person to make financial decisions for you with a power of attorney some years ago, his or her circumstances may have now changed, along with your situation. Consult with an attorney about how to proceed.
We like to think of ourselves as intelligent and self-reliant individuals. However, there are certain things in life, estate plans among them that are best left to professionals. There is a reason for that. Estate law differs from state to state and templates that you find on the web may not be applicable to your situation. They might also not be legal. Do all the online research you like, but when it comes to creating the legal documents for your estate plan, work with an experienced estate planning attorney.
Reference: Modern Medicine (December 1, 2016) “Estate planning: Don’t make these mistakes”