Common Estate Planning Mistakes
The idea of planning for your final illness and distribution of your assets can be intimidating. You may feel uncertain about where to start, or be afraid of making any number of common estate planning mistakes. However, understanding the process and the potential pitfalls can help take the stress out of estate planning. Working with an experienced estate planning attorney will help you make wise choices about your care and your property, and make sure your estate plan is properly executed and useful for your family in the future.
The #1 Estate Planning Mistake is Failing to Plan at All
The unfortunate truth is that many Maryland residents die without ever creating an estate plan. While the state has laws that control the designation of a guardian to care for an incapacitated person, and the distribution of an estate without a will, those laws often don’t reflect the person’s wishes. Most often, this estate planning mistake is simply due to procrastination. People may feel like hiring an estate planning attorney is too expensive, or they have plenty of time to get around to writing a will. When death or disability comes sooner than expected, it can leave the person’s loved ones without a plan for what to do to care for the person and handle their assets and final expenses.
Estate Planning Mistakes in Drafting Documents
When people take a “do-it-yourself” approach to estate planning, it can create the risk of estate planning mistakes related to drafting the documents themselves. One of the most common reasons a will or trust can be challenged is not related to the deceased’s wishes at all. Instead, it is because the documents were prepared and executed improperly.
Without the help of an experienced estate planning attorney, it can be easy to use the wrong forms, miss important documents like advanced health care directives, or skip technical elements like witnesses’ signatures or successor personal representatives in case your first choice is unable to do the job. These kinds of drafting mistakes can cost your loved ones a lot of money down the line. They may have to hire a probate attorney to go to court and advocate to resolve your affairs the way you intended.
Common Estate Planning Mistakes in Communicating with Heirs and Professionals
Once an estate plan is complete, one common estate planning mistake is keeping it a secret from your friends, family, and important professionals in your life. It is essential that you inform your designated personal representative, and any intended guardians or trustees of their role in your estate plan. You should also inform those people where the original estate planning documents are held so they can find them easily after your death and file them with the Maryland probate court.
You also need to provide HIPAA releases, your healthcare surrogate designation, and your advanced health care directives (also called a living will) to your medical providers. This will ensure that they will talk to the appropriate person to make medical decisions for you when you are no longer able to. It will also protect your wishes about how you do – or do not – want to use life-saving treatment to extend your life.
Finally, you will need to provide beneficiary designations and durable powers of attorney to your financial advisor and banks. This will allow the people you designate to manage your finances during your final illness, and facilitate access to your assets after your death.
Avoid Making the Mistake of Not Keeping the Plan Updated
Another common estate planning mistake is failing to keep the plan updated after it is complete. Often, people will execute their will or trust documents, put them in a drawer, and forget about them. Unfortunately, when that happens, life can change, making those documents obsolete or inaccurate to the deceased’s true wishes. If an estate plan isn’t up to date it may omit children, grandchildren, and in-laws that you want to inherit a share of your estate.
It could include ex-spouses and other people you would want to exclude. It could also divide assets you no longer own, or exclude more recent purchases. In addition, laws can change over time so the strategic choices you made at the time of drafting are no longer what is best for you. It is a good idea to review your estate plan with an experienced estate planning attorney every five years or after any major life change, to make sure it still fits your needs and your wishes.
How to Avoid Common Estate Planning Mistakes
The best way to avoid common estate planning mistakes is to develop a good relationship with an experienced estate planning attorney who can help you make wise estate planning decisions, and meet with members of the firm every few years to keep everything up to date. The Law Office of Henry Nash is dedicated to offering skillful estate planning services in Montgomery County and throughout Maryland to individuals and their families. We welcome you to contact us for a consultation.
