Estate planning should be simple. It would be nice if people could just state their wishes and move on with their lives. Sadly, that is not the world we live in. Estates are varied and often complex, with many moving parts to keep track of. Here are some of the most common mistakes people make in estate planning:
- They don’t have a formal estate plan. A lot of people just don’t think they need an estate plan. They convince themselves that they’re young, or their estate is simple, or they can just tell people what they want and be done. While that may be true in some cases, most of the time, this thinking ends in a formal probate and/or family squabbles over who’s more deserving of Mom’s costume jewelry or Dad’s favorite armchair.
- They fail to update the plan. This happens to a lot of people. They go to the trouble of creating the will and/or trust, and they figure they’ve done what’s needed, and they can put it on a shelf until they die. But life happens, and circumstances change, and there are many good reasons to update an estate plan. The people you want to be in charge today may not be the people you want ten years from now, and you may change your mind on who you want to inherit from you or what conditions you want to put on that inheritance.
- Failing to designate beneficiaries. Not everything is controlled by your will or trust. If something has a beneficiary designation, it goes directly to that beneficiary, no matter what the will or trust says. There have been cases where someone tried to change a beneficiary designation through their will (e.g., to remove an ex-spouse), and it failed because the beneficiary designation trumps the will. And if the beneficiary dies or you failed to ever name one, the asset will usually go to the general estate, which could trigger a probate.
- Ignoring digital assets and online accounts. Most people have at least a few online accounts these days. Getting access to these accounts can be a major headache for executors and trustees, because not many people save their passwords in a place their executor/trustee can get to, and the service providers want to see proof that the person has permission to access the account. A will or trust that doesn’t give that express permission usually doesn’t cut it.
- Choosing the Wrong People. Unfortunately, this one happens all the time. People pick their oldest child because they’re the oldest, even though the child is terrible with money. Or they’ll name all the children together, even though they can’t be in the same room without fighting, because then “they’ll have to get along.” Or they’ll pick their “good friend” who proceeds to bleed the estate dry as soon as they get their hands on it.
Estate planning mistakes are avoidable with the right guidance. Whether you need a plan created from scratch or an existing one reviewed, I am here to help you protect what matters most. Email me at kaway@kawaylaw.com to schedule your consultation today.
