You may have heard that the biggest estate planning mistake you can make is to not have an estate plan at all – and that’s generally true.
However, there are other estate planning mistakes people commonly make that can create havoc for their loved ones after they’re gone. Here are a few of the biggest:
Just assuming a will is enough
A will is one of the basic building blocks of a good estate plan – but it’s only a starting point. You need to consider adding:
- A trust, especially if you have minor children or significant wealth to pass on
- Powers of attorney for health care and financial matters so that you have someone you trust to speak for you and direct your affairs if you’re incapacitated before your death
- A living will that is designed to guide your medical providers (and your medical power of attorney) regarding your end-of-life care
- A letter of intent that explains to your loved one your wishes for the disposition of small, sentimental objects or your funeral services
You may also want to consider adding a pre-paid funeral or cremation plan to your estate plans. Having all your final arrangements organized is a gift that you can give to your loved ones in their time of grief – and simultaneously ensure that your remains are handled the way you prefer.
Not updating your plan
When your life changes, your estate plan needs to change with it. Marriage, separation, divorce, the birth of a new child or grandchild and changing relationships between you and your loved ones should all be reflected in a regularly updated estate plan. If you aren’t reviewing things like your will, your powers of attorney designations, your nominee for executor and your beneficiary designations on your insurance policies and other accounts yearly, you may leave behind hopelessly outdated (and possibly useless) instructions.
Keeping all the details hidden
Talking about death (especially your own) can be hard, but keeping your beneficiaries and heirs in the dark about your estate plans is likely to create problems. Unless you’re vocal about your wishes, your loved ones may all end up with different assumptions about your wishes – and that can create a lot of familial conflicts later.
If you haven’t gotten your estate plan together or you need to revise an existing plan, don’t fall into the trap of inaction. Legal guidance is available.