Estate planning is the process of determining a will on how your money and property will be handled, who will take care of your children, and who is responsible for your health care and financial decisions in the event of you being bedridden or deceased. Estate planning is often prepared with the assistance of a probate lawyer.
According to research by the financial services firm D.A. Davidson & Co., only 34 percent of Americans have created an estate plan. However, estate planning activities have accelerated in Florida since the COVID-19 pandemic. People in Florida can hire a Florida probate lawyer to create a proper estate plan.
Creating an estate plan is essential so your loved ones will enjoy them as you wish. Similarly, creating an estate plan without any mistakes is equally important to avoid causing stress and headaches for your family or loved ones.
In this blog, let’s understand the six common mistakes you must avoid while creating an estate plan.
Six Common Mistakes You Must Avoid
Failing to Prepare an Estate Plan
- One of the significant mistakes one can make is not preparing an estate plan or not making it at the right time.
- Unfortunately, most of us procrastinate. Still, the hard reality is that failing to prepare your estate plan at the right time will risk your estate, legacy, and, most importantly, your loved ones’ future financially and mentally.
- Whether you haven’t started your estate plan or have not updated it for more than five years, it’s high time to start or review your plan.
Not Discussing With Friends and Family
- Even if this is not a compulsion, having a brief conversation with your friends and family is preferred.
- Discussing this will reduce the chances of any conflict or disagreement after your death.
- Discussing your estate plan with your spouse or the trustee you nominated in your will is advised.
Nominating Only One Beneficiary
- You must have more than one designated beneficiary for any of your assets.
- In the event of the death of either of your beneficiaries, before you do, you’ll need to have a contingent beneficiary.
- A contingent beneficiary will be the one who receives the benefits if the primary beneficiary is deceased, unable to contact, or refuses to avail of the assets.
- For every asset, ensure that you nominate a primary and contingent beneficiary.
Not Securing Your Estate Plan
- It will be an utter waste if your heirs can’t find where your estate plan is. If you put it into a safety deposit box, it may be difficult for your family and friends to gain access after you pass away.
- However, securing your estate plan documents in a safe place is important.
- Wherever you secure it, ensure your spouse or any trusted family member or friend knows where the document is.
Failing to Update the Plan Timely
- Estate plans need to be updated periodically to ensure that they reflect all the recent life-changing events.
- Major events like marriage, divorce, childbirth, or the death of a family member or beneficiary must be updated in the estate plan.
- Moreover, it is essential to do a general review every three to five years, even if no major events occur.
Forgetting About Power of Attorneys or Healthcare Representatives
- Representing a power of attorney and a healthcare proxy is essential.
- They are the people who have the power to make decisions for you upon your incapacity.
- Mostly, these responsibilities are valid until you are alive.
Creating an estate plan will safeguard your property and assets from falling into the wrong hands and ensure that your loved ones enjoy them. But committing any of these estate planning mistakes will become a problem for your heirs and estate. Get the help of a probate lawyer in preparing a proper estate plan.