That is an excellent question. Just the fact you are concerned is, well, encouraging.
Estate planning mistakes can truly burden your loved ones when they are grieving and most vulnerable anyway.
A recent CNBC article, titled “Don't drop the ball when planning your estate,” offers five common estate planning mistakes that can thwart your ability to provide for your loved ones as desired.
While you will want to click over and read the original article, here is a summary of the five:
No will. A 2016 survey found that 64% of American adults have no will, and about half of them either said they did not need one or just have not gotten around to it.
Depending on the state in which you live and your personal situation, not having a will can result in assets going to people other than those you intend.
A will is the document that states your wishes. Get one.
No updated will. The good news is that you have a will; the bad news is that you have not reviewed it in a decade.
In our office, the average age of wills brought to us for review is equal to the age of a given couple's eldest child.
Too many folks think their wills are “set-it-and-forget-it” documents that never need to be changed.
We marry, divorce, adopt children, have grandchildren … and the list is endless.
Rule of thumb? You should review your will every two years.
Unrealistic ideas about your heirs. When you draft your will, you should consider if your heirs are financially and emotionally able to handle the responsibility of money.
They may not have the appropriate maturity and financial knowledge or may even have an addiction issue. Any of these issues may be a serious problem when giving them a large sum of money.
Consider taking to your attorney about adding provisions in your will to protect your children from the inheritance and the inheritance for them.
No trust documents. Wills help with the division of assets upon death, but trusts can live on for a set period of time to govern the distribution of assets.
A trust can restrict the timing of asset distribution and add conditions for heirs to receive bequests.
Not naming the right executor or trustee. Many people will opt for a relative or old friend in their wills as their trustee.
However, they may be your contemporaries and may not outlive you.
They also may not have the time or inclination to take on the responsibilities of an executorship. Plus, appointing a relative or family friend can increase the odds of friction between heirs.
Instead, you might think about naming a professional executor or trustee.
You hear about websites that can set you up with a will. Nevertheless, these “do-it-yourself” tools have lots of limitations.
While you may never be aware there is a problem with your DIY estate plan during your lifetime, but your heirs likely will when you are gone.
If you are seeking "estate planning peace of mind," then that is reason enough to hire an experienced estate attorney to draft your will and help you update it periodically.
Some people do not want to spend the money, but it is worth it in the long run.
You tend to get what you pay for, yes?
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: CNBC (September 13, 2016) “Don't drop the ball when planning your estate”