Summary: When you’re creating your estate plan, even a minor mistake can lead to major future problems. We’re looking at five common estate planning errors and how to avoid them: 1) failing to create an estate plan, 2) failing to protect yourself while you’re alive, 3) failing to update your beneficiaries, 4) failing to maintain records, and 5) failing to communicate your wishes.
Having a complete and up-to-date estate plan is key to ensuring that your final wishes will be honored. You’ll also have peace of mind knowing that your loved ones and your life’s work will be protected. However, if you make even a minor mistake on your estate plan, it can lead to major problems during the probate process and settlement of your estate. In Siedentopf Law’s latest blog, we’re looking at five common mistakes and how you can easily avoid them with some careful estate planning.
Failing to Create An Estate Plan
Less than half of the US population has an estate plan in place, despite the fact that most of us have at least one valuable possession. Creating an estate plan can maximize the value of the assets you pass on to your loved ones. It can also help ensure that your personal and financial affairs will be handled according to your wishes. If you pass away without a plan in place, it can create unnecessary stress for those left behind. Georgia law will determine who will manage and inherit your property – your assets could end up with individuals who you did not want to inherit them. Family members may also have to spend time and money proving their relationship to you, as well as their rights to any of your property. Further, without a will, you would not be able to designate a guardian for your young children in the event that both parents passed away or were incapacitated.
Failing to Protect Yourself While You’re Alive
Estate planning is not just about distributing your assets when you’re no longer here. It is also about having a plan in place concerning your health and your medical wishes. A health emergency can have a significant impact on your family and your financial affairs. Who will make healthcare decisions on your behalf? Who will take care of your household or your business on your behalf? For your family to make informed decisions about your health and medical care, it’s important to 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 their healthcare preferences in detail. It puts family members, doctors, and hospitals on notice concerning your end-of-life wishes and your medical care if you are unable to communicate your wishes. A Power of Attorney is a document that enables a person to act on your behalf in the event of your incapacity. This dividual can manage your affairs, including financial matters, real estate transactions, and other legal decisions.
Failing to Update Your Beneficiaries
Some of your assets will pass through the probate process. Others, such as life insurance policies, retirement accounts, annuities, and even some bank accounts, do not go through probate. Instead, these documents have a transfer on death beneficiary listed. It is important to carefully consider your beneficiaries when developing your estate plan. Once you have selected these individuals and filled out the appropriate forms, it’s also a good idea to occasionally review and update your estate documents. You should check your beneficiary designations after major life events such as marriage, divorce, births, or the deaths of loved ones. (Unlike other states, Georgia law does not automatically revoke beneficiary designations upon divorce). Reviewing your estate documents and updating them based on your current wishes and family status means that your final wishes will be honored as you intended.
Failing to Maintain Your Records
After spending the time and energy to create an estate plan that’s best for you and your family – it makes sense to then carefully protect and store that paperwork. Having to hunt down your personal documents will only waylay the probate process and create unnecessary stress for your loved ones. Consider keeping your estate plan in an office file, a bank safe deposit box, or even with your estate executor or your estate attorney. Other documents to consolidate include:
- Financial documents: financial power of attorney, account statements, tax returns, recurring bills
- Medical documents: advance directive for health care, health care power of attorney, medical records, insurance information, names and contact information for your doctors
- Legal documents: attorney name and contact information, executor name and contact information, any trust documents
- Property deeds and titles
- List of online accounts and passwords: email, social media, cloud storage, online bank accounts
In addition to maintaining your estate plan and important personal documents, you may also want to leave a Letter of Instruction with your executor, explaining where your paperwork is kept and how to access it.
Failing to Communicate Your Wishes
Once you have completed your estate plan, you should communicate your wishes to your loved ones. Explain to your family your intentions as well as your reasoning behind it. You may want to discuss any unequal inheritances (if applicable) or who will be receiving any tangible or sentimental items. Communicating your wishes can head off some surprised or hurt feelings; it can also help provide peace of mind for everyone involved.
Have Additional Questions? Contact Siedentopf Law
These are just a few of the errors that commonly occur during the estate planning process. For more information about what you should do to ensure that your assets are protected and final wishes are honored, contact Siedentopf Law. We would be happy to discuss the best estate planning options for you and your loved ones, as well as help draft your estate planning documents. You can reach us at (404) 736-6066 or schedule an appointment with us online.
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