Common Mistakes to Avoid in Estate Planning

When you are putting together an estate plan, it is important to ensure that you are making informed decisions throughout the process. This means being careful to avoid several all-too-common mistakes. Not only can oversights and other mistakes leave gaps in your estate plan, but they can also leave your loved ones without the guidance they need in a very difficult time.

Here are 10 examples of common mistakes to avoid during the estate planning process:

Mistake #1: Waiting to Put Together an Estate Plan

One of the most common mistakes we see by far is waiting to put together an estate plan. Far too often, people assume that they don’t need an estate plan until they get married, have children, accumulate substantial wealth or reach a certain age.

But, the reality is that just about everyone can benefit from putting together an estate plan—regardless of their age, family circumstances and financial status. It is never too early to plan ahead, but it can be too late. By putting together an estate plan now, you can provide certainty for yourself and your loved ones, and you can preserve the flexibility you need to make adjustments over time.

Mistake #2: Overlooking Key Aspects of the Estate Planning Process

There are several aspects to estate planning. While the process doesn’t have to be (and generally shouldn’t be) complicated, it is important to be comprehensive. A comprehensive estate plan will address not only what happens to your estate at the time of your death, but also what happens in the event that you become incapacitated due to a serious health issue or catastrophic injury.

Mistake #3: Overlooking Specific Assets

Of course, a key aspect of the estate planning process is deciding how to distribute your assets at the time of your death. While an experienced estate planning lawyer will include a “catch all” provision in your estate plan that ensures nothing goes completely overlooked, it is important not to overlook specific assets during the planning phase. For example, if you want to make sure that your children receive certain heirlooms or that certain assets go to a charitable organization of your choice, you will want to be sure to address this during the process.

Mistake #4: Overlooking Specific Healthcare-Related Considerations

Along with making sure you don’t overlook specific assets, you will also want to make sure you don’t overlook specific healthcare-related considerations. An experienced estate planning lawyer will be able to walk you through all of these considerations so that you can provide as much guidance to your loved ones and healthcare providers as you desire.

Mistake #5: Failing to Address Possible Contingencies

Another all-too-common mistake we see is failing to address possible contingencies. Let’s say you appoint a personal representative as part of the estate planning process, as is standard procedure. What will happen if your chosen personal representative predeceases you? Or, what if one or more of your designated beneficiaries or healthcare decision-makers is no longer around when the time comes?

Since the future is inherently uncertain, it is important to address these types of considerations when putting together an estate plan. This way, should something happen to you before you are able to make changes, you will still have a sound and comprehensive plan in place.

Mistake #6: Failing to Update Pre-Existing Documents and Policies

In many cases, putting together an estate plan will necessitate changes to various pre-existing documents and policies. These may include real estate deeds, retirement account beneficiary designations and life insurance policies, among others. Once you finalize your plan, it will be important not to forget about any changes that you need to make in order to fully achieve your estate planning goals.

Mistake #7: Ignoring Potential Tax Implications

Various aspects of the estate planning process can potentially have tax implications. While federal estate and gift tax exemptions will often prevent grieving family members from incurring tax liability,  it will still be necessary to incorporate tax planning into the estate planning process in many cases. Tax planning is a perfectly legitimate way of avoiding unnecessary tax liability, and effective planning can help individuals and families achieve substantial tax savings in many cases.

Mistake #8: Creating Inconsistent Estate Planning Documents

A typical estate planning may consist of a will, one or more trusts, and various healthcare-related planning documents. Beneficiary designations for retirement accounts, brokerage accounts, life insurance policies, and other assets can come into play as well.

As a result, consistency is important. If you have inconsistencies across one or more of your estate planning documents, this can leave your loved ones and healthcare providers (and Florida’s probate courts) without clear guidance for the future.

Mistake #9: Not Giving Enough Consideration to Important Issues for You and Your Family

While no one wants to put together an estate plan, it is important to give the process the time and consideration it deserves. If you aren’t sure how you want to address a particular issue, take some time to think about it. If you have questions, don’t hesitate to ask them.

Mistake #10: Trying to Build a Comprehensive Estate Plan on Your Own

Finally, due to the importance of the estate planning process and the negative outcomes that can result from common mistakes, you should not try to build your estate plan on your own. While it might seem like you are saving money by putting together a “DIY estate plan,” this approach can prove very costly down the line. To ensure that you are making informed decisions for yourself and your loved ones, you will want to work with an experienced estate planning lawyer who can guide you through the process while focusing on your specific goals and needs.

Schedule a Free Initial Estate Planning Consultation at Douglas Law Firm

Are you thinking about putting together an estate plan? If so, we invite you to get in touch. To schedule a free initial consultation with a Florida estate planning attorney at Douglas Law Firm, please call 800-705-5457 or tell us how we can reach you online today.