Don't Make These Two Major Estate Planning Mistakes
by Maurice Moore
Whether you are considering making an estate plan or already have one in place, you can learn from the mistakes of others. These are two major issues that can cause your carefully-made plans to be incomplete. Read on to learn more about these issues so that you can avoid the mistakes others have made.
Never Revisiting Your Plan
Even the best estate plans will eventually become outdated. Failing to update your plan may be more harmful than you think. Using plans that have old provisions, that address property that no longer exists, or that leave assets to inappropriate beneficiaries will only make things difficult for your loved ones. How often should an estate plan be revisited? There is no set time but most experts advise doing so after any major event like some of the following:
Every time the IRS makes big changes in the tax code.
Any time your state changes inheritance laws.
When your family structure changes with a birth, death, marriage, adoption, or divorce.
When a business is bought or sold.
If your wishes in regard to charity donations change.
When a home or other real estate is bought or sold.
When you make a big change in your investment strategy.
When you wish to add or change important estate components like life insurance, revocable trusts, powers of attorney, health and medical issues need to be addressed, etc.
Leaving Out Disability and End of Life Issues
Estate plans can address not only what happens after death but what might precede it. With people living longer than ever, health and medical issues can become burdensome for loved ones without proper directions. With that in mind, be sure your estate plan stretches to include the following:
Long-term care plans – Whether it's an assisted living facility or a skilled nursing option, care of this type is very expensive. The sooner you take action, the less expensive these plans will be.
Medical and health needs – A living will is a simple document to execute and will take the burden of decision-making off of your loved one's shoulders. As part of an estate plan, this document sets out your wishes in regard to resuscitation in the event of certain medical conditions.
Powers of attorney (POA) – You can have several POA designations in place that cover a wide variety of issues from business-related to medical to personal. This covers you if you become incapacitated or if you are temporarily out of the country.
The above issues are just a sampling of what should go into a complete estate plan. For more information about using a probate attorney to help you plan your estate, contact a local law firm.