5 Big Mistakes You Could Make with Your Estate Plans

Estate attorneys see many estate plans go into place, and many of these plans go awry. When you work with an experienced estate lawyer, they can help steer you away from potential missteps.

The five most commonly made mistakes in arranging your estate are:

1. People overlook that second or third marriages require estate updates

Blended families are wonderful, but they carry with them a unique sets of challenges. Sometimes these challenges can overwhelm people, and get in the way of considering financial concerns. It is much more common for first marriages (or only marriages) to have proper estate planning, than it is for later marriages. As families grow, so does the need to ensure all family members are considered in estate planning . Some of this can be easily addressed with joint accounts and additional life insurance. It is merely a question of putting these plans into action.

2. People don’t keep up with their estate plans

As family members graduate from college, move to other states or countries, or pass away, estate plans need to be updated. Changes in your family structure mean that changes in your estate plan need to be made. Also, as tax laws change, the amounts that can pass as tax-free gifts can change. So can the estate taxes and other laws for each state if you or other family members move. After a major life event—a birth, death, marriage or divorce—you should re-visit your estate plan. And as a rule of thumb, you should re-visit and possibly revise your plan every five years.

3. People designate their beneficiaries inaccurately

Joint accounts are tremendously helpful tools. Bank and brokerage accounts which are jointly owned transfer automatically, saving everyone time and labor time after a death. There are details to take into consideration, however, especially regarding 401(k) plans and IRAs. Having the proper type of beneficiary designation can avoid additional taxes. In many cases, it is merely a question of having the proper titles attached to each account.

4. People try to draft these documents themselves

Many internet sites claim to help you craft your own estate plans and make your own legal documents. Even with the help of the internet, estate planning is not that easy. Enacting the documents, and then executing them in such a way that the state recognizes them, is another matter entirely. If a Will is executed improperly, it is immediately invalidated. Seeking the help of estate planning legal services to draft and execute your documents will eliminate the guesswork and uncertainty.

5. People do not account for disabling conditions or accidents

It is one set of concerns to consider what happens in the event of your own death. Many people put Wills and living trusts into place, and these documents address what happens if they die. But what happens if you are incapacitated? What happens if you are still alive, but cannot act on your own behalf in financial or legal matters? Health care directives, durable powers of attorney, and other instruments are necessary to have in place—even if your incapacitation is temporary. You can appoint an agent of your choosing to handle sensitive matters for you while your injury makes you unable to represent yourself. Then, when you have recovered, you can resume control of all of your legal and financial details.