Every estate planning attorney in Torrance has, at some point in their career, heard a sad story about complications in handling a loved one’s estate. Legal language can be tricky, and sometimes a minor mistake can cause major problems. One way to prevent potential conflict among family members or a lengthy and expensive probate process is to avoid some of the most common estate planning mistakes.
Not Having an Updated Will or Trust
The number one mistake in estate planning is not updating your documents included in your estate plan. Any time you have a major life event change, you should review your Will or Trust to check for any needed changes such as adding or removing a beneficiary or a major asset. If you do need to make changes to the beneficiaries, remember that life insurance policies, 401(k) plans, IRAs, and other financial accounts often have their own beneficiary designation documents that will need to be updated as well.
Some examples of major life events that call for a review of your estate plan include the death of a spouse or other beneficiary, marriage or divorce or remarriage, and birth or adoption of a child. If any of your beneficiaries have passed away and you don’t have a contingent or backup beneficiary named, those assets could be held up in probate. If a child has joined your family, you’ll need to amend your estate plan to include naming a guardian for the child as well as someone to manage any inheritance left for them.
No Healthcare Directives
Accidents or illness can strike anyone at any time, regardless of age or health status. Not having the appropriate documents in place could leave your loved ones in a difficult position. By having a living will prepared, you can make sure that your wishes in regard to your medical care are known. A Power of Attorney for Healthcare allows you to actually name the person(s) whom you want to make such healthcare decisions on your behalf if you are incapacitated and can’t speak for yourself. It’s also helpful to have HIPAA authorizations on file so that your medical providers will be able to share your healthcare records with whoever you’ve named in the document.
Not Taking Advantage of Favorable Tax Laws
Tax laws, at both the state and federal levels, can affect how much of your assets actually end up in the hands of your loved ones. Tax laws change often, so it’s important to have a relationship with an attorney who is frequently reviewing your plan to ensure that you are taking advantage of all favorable options. You can also help reduce the amount of taxes that may be owed by your estate when you die by taking advantage of laws regarding gifts. These laws are also subject to change and could impact other aspects of your planning, so be sure to embark on any planned giving strategies with the help of an estate planning attorney in Torrance.
Not Having an Estate Plan
Obviously, not having an estate plan of any kind is a major mistake. Every adult, even if they’re young, unmarried, and childless with few assets, should consider starting their estate planning. It’s never too early to have some basic documents such as a will and healthcare directives in place. Of course, it’s even more important for those who are married, have children, or have a considerable amount of assets to have a complete estate plan.
Not Consulting with an Estate Planning Professional
It’s easy to find fill-in-the-blank estate planning documents online for a small fee or maybe even for free. However, do-it-yourself estate plans aren’t typically effective and may not be in accordance with laws that are specific to your state of residence. Using an online template can also cause you to overlook some of your specific needs. For many reasons, planning your estate isn’t an area where you should be taking the cheapest route possible. Hiring a lawyer to help you with your estate plan is worth the cost, and that cost may be less than you expect.
How to Get Help If You’ve Made a Mistake
If you’ve made one of the mistakes listed above, or you if you’d like to get started creating a plan that protects your family and assets, we can help. Simply call our law firm at (310) 782-6322 to schedule an appointment with a Torrance estate planning attorney.