Estate Planning is one of the crucial steps you can take to help secure your family’s financial security. Many people unknowingly make costly mistakes during this process. You must understand the risks and pitfalls in order to avoid these errors. In this blog we will discuss four common mistakes that should be avoided when engaging in estate planning: neglecting estate planning altogether; failing to update the plan; not including a healthcare directive and power of attorney; and failing to seek professional advice. By steering clear of these estate planning traps, you can protect your loved ones and ensure that your assets are distributed according to your wishes.
Thank you for reading this post, don't forget to subscribe!
Mistake #1: Failing to Create an Estate Plan
While the idea of creating an estate plan might be overwhelming, it is vital for securing your family’s financial future. A comprehensive estate plan includes a will, maybe a trust, power of attorney and health care directives.
Not having an estate plan can cause your assets to be distributed according to state law, which may not fully reflect your wishes. Without a power of attorney, you won’t have someone to handle your financial and legal affairs if you become incapacitated. Additionally, without a healthcare directive, your family may not know your wishes for medical care.
Failing to create an Estate Planning Checklist
- Consult with an experienced estate planning attorney
- Create a will to specify how you want your assets distributed
Mistake #2: Neglecting to Update the Estate Plan Regularly
Estate planning is not a one-time occurrence but rather an ongoing process that requires regular revisions. Neglecting to update your estate plan can result in costly errors and unintended outcomes.
For instance, life events such as divorce, remarriage, the birth of a new child or grandchild, asset disposals, family deaths or significant changes in financial circumstances can render the original estate plan obsolete. Failing to revise the plan accordingly may lead to the exclusion of intended beneficiaries and assets being distributed contrary to your desires.
Regularly reviewing and revising your estate plan every three to five years or when major life changes occur is crucial. Consulting with an experienced estate planning lawyer can provide valuable guidance in keeping your plan current and aligned with your specific aspirations and desires.
Mistake #3: Failing to Include a Healthcare Directive and Power of Attorney
When individuals think about estate planning, their primary focus is often on how their assets will be distributed after they pass away. However, it is equally crucial to consider the possibility of medical emergencies and incapacity. To address these concerns, incorporating a healthcare directive is necessary. This document will empower someone you designate to help with medical decisions when you are unable to make decisions independently. By having this document in place, you not only gain peace of mind but also ensure that your desires regarding medical intervention are respected and adhered to.
In addition to a healthcare directive, it is essential to include a power of attorney in your estate plan. This legal instrument appoints an individual whom you trust implicitly with the authority to handle financial and legal matters on your behalf if you become incapacitated. Without such provisions in place, there may be considerable uncertainty surrounding the management of your finances and assets since decisions could potentially fall under court jurisdiction, leading to costly delays. Failing to include these fundamental documents in your estate plan exposes you to the risk of relinquishing control over both your medical well-being and financial future.
Mistake #4: Failing to Seek Professional Advice
Trying to create your own documents, or using forms created for someone else’s situation is asking for trouble. It could also have enduring financial repercussions for your loved ones. It is imperative that you consult with a skilled attorney who is knowledgeable in estate planning and possesses the experience to provide invaluable advice while ensuring adherence to all legal obligations. Moreover, they can assist you in identifying potential complexities while offering optimal solutions aimed at safeguarding your family’s financial health.
Although it might be tempting to save money by handling estate planning independently, the potential risks and expenses associated with making errors far outweigh any immediate cost-cutting benefits. As such, professional estate planning assistance should be on your checklist in order to keep you from falling into this costly trap. If you need a Florida estate plan, call Burzynski Law Office at 239-434-8557 to get started.