Estate Attorneys Reveal Five Common Estate Planning Mistakes
Estate attorneys explain common mistakes made by individuals planning their estates or preparing wills. Estate planning attorneys can help you avoid errors that could leave your heirs in a financial bind.
No one likes to think about their own death, but we all need to consider what could happen if we die without a proper will and estate plan in place. This is particularly important if you have minor children at home or a special needs child of any age. Many people have a will drawn up at some point in their lives and then forget about it, assuming that it can protect their family indefinitely. The problem most families face is that an old document or out-of-date plan can lead to considerable problems. Recently, specialists outlined some common mistakes made by well-meaning individuals who failed to consult with estate planning attorneys or elder wills lawyers.
Mistake #1: Not Having A Plan
Many individuals assume that if they don't have a lot of assets, they don't need a plan. They reason that life insurance should cover their families' needs after they are gone and that their heirs can be relied on to divide personal items, etc. amongst themselves fairly. Unfortunately, a death in the family can reveal the worst in people, who may get into ugly battles over the family silverware or a favorite antique. Life insurance may not be sufficient enough to pay for the needs of minor children or a spouse, and inheritance taxes can eat up a huge chunk of your assets if you haven't met with estate attorneys who can structure your assets properly in order to minimize tax liabilities and maximize benefits for your intended heirs. Not having a plan can put your family's future in the hands of strangers.
Mistake #2: Having An Outdated Plan
If you had your will prepared when you were a newlywed, it probably isn't going to be relevant now that you have three minor children. Don't assume that you can prepare a document that can last through any life changes. Whether it's a death in the family, the addition of children, a divorce or a substantial increase in your earning power, estate planning attorneys or elders wills lawyers can update your will so that it addresses your current state in life as well as the status of your spouse and children.
Mistake #3: Trying To Do It Yourself Instead Of Consulting Estate Attorneys
DIY projects should never include preparing your estate. The laws for both vary widely from state to state, and those laws frequently change. Do-it-yourself kits are a "one size fits all" solution that simply doesn't work. No one else has your unique combination of assets, liabilities, family members and concerns. Estate planning attorneys can review your unique situation and propose the plan that will work best in your particular situation.
Mistake #4: Failing To Review Beneficiary Designations
Do you have life insurance, an annuity, 401K, IRA or pension? Do you know for certain who the designated beneficiary of these financial programs is? More than a few individuals have passed away assuming that because their will outlined whom their retirement accounts and other investments should go to, everything would work out fine. Not so, because the designated beneficiary in each of these financial accounts overrides even a more recent will. So if your 401K was set up years ago with your now ex-wife as the beneficiary, a will saying it should go to your children won't change anything.
Mistake #5: Assuming You Don't Need An Estate Plan Because You're Young
Although elders wills lawyers meet more often with people of retirement age, they will be the first to tell you that young adults should put a solid financial plan into action for after your death. If you have minor children or a family member with special needs, it is even more important that you create a plan and discuss the care needs of your minor children with experienced attorneys so that you can designate who should care for them when you no longer can.
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ABOUT THE AUTHOR
Peck Bloom's estate planning attorneys in Chicago can help you avoid costly mistakes that can impact your heirs. Their experienced elder wills lawyers in Chicago can also administer guardianships and trusts. Visit their website today to request a free consultation.