It’s a mistake not to have an estate plan in place when you die, because it will create problems for your survivors. If there is no estate plan, there can be legal issues, financial penalties, and extra fees involved, and there is always the possibility of divisions within the family because your wishes were not clearly known.
Just because you have an estate plan, however, doesn’t mean you are free from problems. Estate plans can be poorly set up, or they can become out of date due to changing circumstances. Here are a few common mistakes that people make in their estate plans.
- Poor planning for joint assets. If you share assets with someone and they have a lot of debt after you pass away, there could be a court battle as that person’s debtors try to get a slice of the assets. There are various strategies for avoiding this, and an experienced estate planning attorney can help you to protect those assets.
- The wrong people as successor trustees. If you name two or more people as co-successor trustees but they don’t agree (or, worse, they are feuding with each other), you will have all sorts of problems with the disposition of your estate. This can be avoided by naming a bank, other institution, or a professional as the primary trustee.
- Beneficiaries that are out of date. Relationships can change over time, and the people you named as beneficiaries when you first made your estate plan may need to be replaced due to changing circumstances.
- Lack of long term care planning. Estate plans are not just for after your demise; they can also cover your wishes for end of life care. It’s worthwhile to include your wishes about long term care in your estate plan, so there are no questions about what you want if the need arises.
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