An estate plan ensures that your wishes are respected and that your loved ones are provided for after your death. However, an estate plan that's done haphazardly can do more harm than good. To provide yourself with true peace of mind, you need to be careful to avoid these four common estate planning mistakes.
1. Assuming an Estate Plan Is Only About Money
The single most common mistake people make is thinking that estate planning is only for people with sizable assets. In addition to deciding financial matters, an estate plan also includes health care directives, financial power of attorney, guardianship of minor children, beneficiaries for life insurance, and coverage of funeral expenses. These are all issues of importance to the typical middle class family.
2. Not Keeping Your Heirs in the Loop
It's your legal right to leave your assets to whomever you please. However, if you are planning on leaving different amounts to each of your children or making sizable charitable donations, you should make sure your heirs are aware of your decision. When sudden surprises occur, this can create unnecessary tension in the family for generations to come.
3. Forgetting to Regularly Update Your Estate Plan
Estate planning is an ongoing process. Your will and other documents need to be reviewed periodically to make sure they're consistent with your wishes and changes in your financial circumstances. Monumental life events such as births, deaths, divorces, and marriages should trigger an automatic review.
4. Thinking a DIY Approach Is Sufficient
There are multiple websites and books offering DIY estate planning advice. Unfortunately, this advice is often too general to be truly useful. Estate planning requires considering your family circumstances, goals, and the tax consequences of how you plan to distribute your assets. Consulting an experienced professional will help ensure that your plan fits your needs and won't cause unnecessary stress for your loved ones.
Attorney George H. Pender heads the Estate Planning, Trust and Probate & Estate Administration Practice Group of Teague Campbell. As a member of WealthCounsel, WealthCounsel Advisors Forum, the N.C. Forum of Estate Planning Attorneys, and the Triangle Chapter of the Financial Planners Association (FPA), he has the skills and experience needed to help you prepare an effective estate plan. Call (919) 873-0166 to schedule an appointment.