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Avoid Making These 3 Estate Planning Mistakes

A Strong Estate Plan Is Essential to Safeguarding Your Legacy

Many people get uncomfortable when contemplating what will happen to them and their assets once they pass away. Estate planning is not necessarily the most pleasant task, but it is imperative to protecting your family and ensuring your final wishes are honored.

However, many fail to take the proper steps in building a robust estate plan. Neglecting to consider every eventuality can lead to devastating consequences for you, your property, and your loved ones. Too often do we see scenarios where an individual omits a critical document and creates additional hardship in the wake of tragedy, making life more difficult for their already grieving family and friends.

A strong estate plan should be made with the guidance of an experienced attorney and cover a wide range of documents specific to your circumstances and goals. Below, we cover 3 of the most critical mistakes every individual should seek to avoid making.

Mistake #1: Failing to Keep Your Estate Plan Current

As you grow older, your relationships, location, needs, wishes, or even the laws may all change. As a result, your estate plan may become out of date with your current wishes and consequently require changes.

Consider how an estate plan for a young couple expecting their first child would have drastically different priorities than an elderly grandparent planning for end of life. The reality is you might at some point be in both scenarios yourself, and your estate plan needs to evolve as your life evolves. If you are part of the young couple expecting a child, you may want to establish a trust protecting funds for their future. If you are the aging grandparent, you may want to consider advanced planning to safeguard your assets from federal estate taxes or implement long-term care planning to protect your interests should any medical conditions arise. Any time a major life event occurs – you have a child, move, get married, someone you love passes away – you should consider the implications to your estate planning documents and make updates accordingly.

Understand that state laws governing estate plans can differ substantially, so if you move, it is critical you consult with an experienced estate planning lawyer to identify any discrepancies or vulnerabilities introduced by your new state residence and potentially formalize documents in the new state, if necessary. A failure to keep your documents current can not only result in delays and legal difficulties in the administration of your estate plan, it can also introduce an additional hardship to your loved ones. Though your family and other loved ones may be able to work out any problems posthumously, you can save them a tremendous amount of time and resources by reviewing and updating your estate plan documents regularly. An experienced estate planning attorney can help identify potential areas to address as your life evolves.

Mistake #2: Not Establishing a Trust

Many do not realize the power and benefits of trusts and consequently and erroneously omit them from their estate planning. A living trust establishes who will receive your assets and under what terms or conditions (including you passing away). You appoint a trustee to administer this trust on your behalf. Beyond keeping your financial affairs more private and helping to avoid the strain and frustrations of probate court, a living trust can provide ongoing asset protection and control.

One of the single most beneficial elements of a trust is the ability to avoid probate court. A contested last will and testament can tie up your assets in months or even years of legal disagreements and probate court battles, but trusts avoid this scenario and better protect your estate on behalf of your loved ones. Trusts can represent ongoing asset protection for your minor children, loved ones with disabilities, those suffering from substance abuse, and other vulnerable categories. Not creating one can either result in your assets not being distributed in accordance with your wishes or force your loved ones to endure the trials of probate court.

Mistake #3: Failing to Plan for Incapacity

Many people associate estate plans, wills, and trusts with determining what happens to an individual’s wealth after death. In actuality, a strong estate plan protects your interests while you are alive, too. For example, establishing powers of attorney can authorize your loved ones to make medical and financial decisions on your behalf should you become incapacitated.

Consider a scenario where you are severely injured in a car accident and, having been knocked out, are unable to advise on the resultant critical medical procedures. If you have no powers of attorney, you will be subject to the decisions of the medical staff treating you, but if you had designated a medical power of attorney, your loved one could offer guidance on the instructions you have specified. A financial power of attorney could similarly manage your affairs while you recover.

Medical and financial powers of attorney can be extremely helpful in scenarios where you are unexpectedly incapacitated as a result of an injury, but these and other elements of estate planning are also essential to assist you as you grow older and need more help managing your affairs.

You could, for example, begin to experience some memory loss or early signs of dementia. Not only is it wise to have medical and financial powers of attorney established in the event that you, over time, become unable to fully make your own decisions, you will also want to ensure the rest of your estate plan is current and formalized. Portions of your estate plan can end up in probate court if there is any question of whether you were fully cognizant at the time of its writing, so keeping yours updated before issues arise is vital to protecting your wishes and loved ones.

The bottom line is you should be proactive in planning for a situation in which you are unable to advocate for yourself. Thorough estate planning gives you numerous tools to do so in addition to powers of attorney, including living wills and advance directives. Failure to establish any of these documents means your loved ones will not have any authority to act on your behalf in a crisis.

Shape Up Your Estate Plan Today

By now you have read about the potentially high price you can pay for neglecting your estate plan. You owe it to yourself and your loved ones to make sure you have plans in place for your and their future. At Kitzke & Canfield, we have over 40 years of combined experience in helping our clients protect their legacies through estate planning. We understand every facet of the estate planning process and what kind of scrutiny your documents might be under in probate court, and we will put that knowledge toward optimizing your strategy.

If you have questions about your estate plan or need help starting one, schedule a consultation with our estate planning attorneys by dialing (262) 214-6827 or contacting us online.