3 Estate Planning Mistakes You Can Fix
Choosing to make an estate plan is smart, but some individuals happen to make mistakes at the same time. Estate planning should not be intimidating. Here are common estate planning mistakes, their consequences, and how to avoid or resolve them:
1. Update estate plans. Like many other tools we use in our lives, estate plans need maintenance. Update your estate plan for a new baby, marriage, divorce, job change, health issue, or law change. Your interests and the interests of your loved ones will develop over time with life changes. A simple annual review can help prevent missing important revisions. Review every part of your plan, including beneficiaries, retirement accounts, and advance directives. A stale estate plan can be just as problematic as not having one at all. What if the person you appointed power of attorney over your healthcare decisions has passed away and you have not named a contingency? Who will make important medical decisions on your behalf if you are incapacitated? Documents must meet certain requirements to be valid in North Carolina. Retaining an estate planning lawyer instead of doing it yourself will ensure comprehensive, up-to-date documents are executed and all issues and contingencies considered. Bills regarding digital estate planning in North Carolina may be passed into law this year and an attorney can keep you informed about other important law changes.
2. Not planning for illnesses or incapacitation. Should you become ill or incapacitated and unable to care for yourself, who will make decisions on your behalf? Manage properties you own, maintain or sell your vehicles or personal property? Without the appropriate powers of attorney, your loved ones will not have the legal authority to manage your assets. Family members may have to resort to expensive court visits in order to be granted these powers and make sure you are cared for.
3. Forgetting to fill out beneficiary designation forms. Beneficiaries designated on forms for bank, investment, life insurance, and retirement accounts will receive the respective assets even if a Will states otherwise. This means if you updated your beneficiary forms in 2010 with your siblings’ names, and in 2013 you updated your Will to reflect your spouse as primary heir of all your assets, the forms that will be recognized during the administration of your estate are the designations and your siblings will inherit the assets. Read more about updating beneficiary designations.
It is not uncommon to create and forget about one’s estate plan, but the above mistakes can be avoided with regular reviews of your estate plan with an attorney. An estate planning attorney in North Carolina can help you avoid other possible mistakes that may be unique to your particular situation. This is especially important for families who require special needs planning or protection for substantial assets.