Summary: When it comes to protecting yourself, your assets, and your loved ones, there are a lot of misconceptions out there. Siedentopf Law takes a look at the top three estate planning mistakes people make.
Many people, when they hear the phrase “estate planning,” think of wealthy individuals writing a will to explain who gets property and possessions after they die. Or perhaps some have estate planning on their To Do list, but have not made it a priority. When it comes to protecting yourself, your assets, and your loved ones, there are a lot of misconceptions out there. Here is a look at the top three estate planning mistakes people make:
#1 Not having an estate plan
According to a recent Gallup poll, only 44% of the American population has an estate plan in place. That means more than half of the public does not have a will, despite the fact that most of us has at least one valuable possession – whether that be a vehicle, a house, or perhaps a bank or retirement account. Creating a thoughtful estate plan can maximize the value of the estate you will pass to your heirs and beneficiaries. It will also ensure that your personal and financial affairs will be handled according to your wishes. For more on developing an estate plan, you can read our blog “When should I start thinking about creating a will?”.
#2 Not considering yourself in your estate plan
Estate planning is about providing for your loved ones and beneficiaries. It is also about taking care of you, in case of incapacity or long-term disability. An emergency or health crisis can have a significant impact on your personal and financial affairs. Who will take care of your children, pay your bills, or make healthcare decisions on your behalf? In order for your family to make informed decisions about your finances and your health, you should have an Advance Directive for Health Care and a Durable Power of Attorney in place. An Advance Directive for Health Care is a form in which a person lists his or her health care preferences in detail. It puts family members, doctors, and hospitals on notice concerning your end-of-life wishes and your medical care desires during times when you are unable to communicate your wishes. A Durable Power of Attorney is a document which enables a person to act on your behalf in the event of your disability. This named individual can manage your affairs including financial matters, real estate transactions, and other legal decisions. An Advance Directive for Health Care and Durable Power of Attorney, along with a Last Will and Testament, provide the foundation for an estate plan and help people stay in control of their financial, legal, and health decisions.
#3 Not updating your estate planning documents
An estate plan is a collection of living documents – meaning that as changes happen within your family or business structures, your estate plan should change as well. It is a good idea to review your estate plan every few years, especially after significant life events such as marriage, births, divorce, death, or inheritances. You want to make sure your current estate plan meets your financial goals, protects your loved ones, and leaves your assets to your intended beneficiaries. For more advice on when to update your estate plan, read our blog “New addition to the family? Time to update your will.” In addition to updating your estate planning documents, it is also important to update your beneficiary designations. Items such as retirement plans and insurance policies are not passed down according to an individual’s will; these are passed down based on the beneficiaries named on the forms themselves. So, just as you update your estate planning documents after a significant life event, you should also update your beneficiary designations.
Creating an estate plan that reflects your current wishes can provide peace of mind to you and your loved ones. If you are interested in developing an estate plan, contact Siedentopf Law via our website at EstateLawAtlanta.com or by calling (404) 736 – 6066.
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