Most Common Estate Planning Mistakes Everyone Should Avoid

Estate planning is important for individuals of all ages, races, income levels, and backgrounds. With a proper estate plan, you can ensure that your assets are distributed to beneficiaries in the way you want them to be. You can also use estate planning instruments to reduce estate taxes, avoid probate, donate to charitable causes, plan for incapacitation, set up financial support for a disabled loved one, and much more. Unfortunately, many people make costly mistakes when creating their estate plans. Here are some of the most common estate planning mistakes that everyone should avoid:

Mistake #1: Assuming You Do Not Need an Estate Plan

The first and most important mistake is not having an estate plan in place at all. Without a will or trust, there is no way to ensure your final wishes will be followed. If you pass away without a will, a court will decide who inherits your assets and who makes decisions about your care if you become incapacitated. Many people assume that only wealthy individuals or those with large families require an estate plan, but any adult can benefit from setting up an estate plan.

Mistake #2: Only Naming One Beneficiary

When creating beneficiary designations on retirement accounts or insurance policies, many people will name only one beneficiary to receive their assets upon death. This can be a major problem if something happens to the primary beneficiary before you pass away. You should consider naming multiple beneficiaries in case of divorce, death, or other changes in family circumstances.

Mistake #3: Not Talking to Your Loved Ones About Your End-of-Life Wishes

Your estate planning documents are a great way to communicate who you want to make decisions on your behalf should something happen to you and how assets should be distributed upon your death. However, it is essential to have a conversation with your loved ones about your plans and let them know what you want. This can help ensure that your wishes are followed and can help to prevent any misunderstandings or disagreements among family members.

Mistake #4: Neglecting Incapacitation Planning

Many people focus solely on distributing their assets upon death but fail to plan for incapacity caused by severe illness or injury. If you were terminally ill, who would you want to manage your financial affairs? Who should make medical decisions on your behalf? Would you want medical treatments such as mechanical ventilation, artificial nutrition, or dialysis? How do you feel about organ donation? A durable power of attorney and a living will are two popular estate planning instruments that allow you to plan for incapacitation and ensure your medical decisions are respected.

Mistake #5: Not Updating Your Will Regularly

It is essential that you update your will and other estate planning documents regularly. This includes updating beneficiaries and executors, and making sure the document still reflects your wishes. Additionally, changes in the law or your personal situation may require updates to your will. For example, moving to a different state, getting married or divorced, or losing a loved one can all impact your estate plans.

Call our Naperville Estate Planning Attorneys for Help

Estate planning can be complex and requires careful consideration. It is important to work with an experienced estate planning attorney who can help you avoid making costly mistakes. Contact the skilled DuPage County estate planning attorneys at The Gierach Law Firm today to discuss your needs. We can help you develop a comprehensive plan that meets your particular requirements. Call 630-756-1160 to set up a consultation.

Source:

https://www.kiplinger.com/article/retirement/t021-c047-s002-why-everyone-needs-an-estate-plan.html