Young couples who are building a family together and professionals who are thinking about their security need to put together estate plans. As do retirees, young adults and anyone else who has a vested interest in controlling their legacy instead of handing that power over to the state. Someone’s current family and financial circumstances determine exactly what they need from an estate plan, but any adult could potentially benefit from the creation of testamentary and living documents.
With that said, not just any documents will do. There is also a noteworthy possibility of someone’s estate plan being negatively affected by a variety of challenges if they make any of the estate planning mistakes noted below.
1. Not complying with current probate laws
There are certain state and federal laws that will influence someone’s legacy and obligations when they die. For example, the federal government imposes an estate tax on the states worth well over $12 million. The state has rules in place to protect the basic rights of spouses and creditors when people die. Estate plans must comply with the law or they may not hold up in probate court after someone dies.
2. Having conflicting documents on record
One of the most common estate planning mistakes that people make involves leaving behind contradictory instructions as people make piecemeal additions to their estate plans but never perform thorough updates and revisions to their documents. For example, someone’s will could name their children as the beneficiaries of their life insurance policy, but the paperwork filed with the insurance company might name their ex-spouse. Testators typically need to make sure that their paperwork is all in agreement.
3. Ignoring out-of-date details
People’s family relationships and personal resources change throughout their lives. Maybe a family member dies and can no longer serve as the executor of an estate or receive any property from it. Perhaps someone sells their home or other assets that they had previously included in their estate plan. It is crucial for those preparing for the future to address any major changes in their circumstances by updating the assets included in their will or trust documents as well as the beneficiaries and the people that they empower with their paperwork.
Having professional legal support while creating an estate plan and when reviewing it for accuracy and effectiveness can help give people who want to control their legacy better peace of mind and more protection.
