If everyone took the time to talk to an estate planning lawyer, most of the common estate planning mistakes around today would disappear. The reality is, however, that most people never get around to taking estate planning seriously, much less talk to an expert, so mistakes are common. Here is a list of some of the more common mistakes people make when they approach estate planning.
Common Estate Planning Mistakes:
Ignoring Beneficiary Selections
You may want to leave your children an equal inheritance, but inheritances are about more than just making a will and making sure everyone is treated equally. Some property doesn’t pass to inheritors through your last will and testament. Instead, it passes outside of probate automatically.
One the most important types of this kind of property allows you to name the beneficiary of your choice. Life insurance policies, retirement plans, and other transfer-on-death assets let you choose who you want to inherit the property upon your death. When you choose your beneficiary for these types of properties, you should do so with your overall inheritance plan in mind. If you make your inheritance choices later and forget about these transfer-on-death policies, this can cause a significant difference in the inheritances you leave.
Making a Plan Without Legal Help
Many people choose to make their own estate planning tools. While this doesn’t always lead to problems, it can be a serious mistake.
This is most often true because people who use do-it-yourself estate planning tools don’t take the time to have a lawyer review them. Even though the legal requirements for creating many estate planning elements are not especially hard to meet or understand, it’s using these tools correctly that causes most people to go wrong.
For example, a lot of people want to create their own last will and testament. There’s nothing wrong with this, and creating a will is not especially difficult. The problems arise, however, when you create a document that isn’t suited to your individual needs. There are a lot of choices that go into creating a will, and creating one that doesn’t fit your situation is a serious mistake.
Not only that, but an estate plan is comprised of numerous different pieces, all of which need to fit together like a jigsaw puzzle. If you create only one piece on your own and fail to create the other pieces that you need, the estate plan you make can be a huge mess.
Not Making Any Kind of Plan
The single greatest mistake most people make is not to have any kind of estate plan in place. Yes, estate planning issues are not easy to think about or talk about. But these problems don’t go away simply by ignoring them, and being responsible means creating an estate plan.