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Common Estate Planning Mistakes

July 10th, 2024 | Estate Planning | Financial & Retirement Planning | Wealth Management | Affordable Housing | Cannabis | Construction | Education | Employee Benefit Plans | Government | Healthcare | High Net Worth | Manufacturing | Nonprofit | Small & Midsize Businesses | Telecommunications
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By: Devan Alexander and Jen Danko Having a solid estate plan in place before an unthinkable crisis is the best way to ensure your legacy is preserved and your wishes are honored. An estate plan can provide peace of mind, knowing that your loved ones will be taken care of, and planning can minimize potential disputes, reduce the tax burden on your estate, and ensure that your philanthropic goals are met.   Estate planning includes a comprehensive review of your assets, the creation of essential documents like wills and trusts, and the designation of beneficiaries for your accounts and insurance policies. 

Estate Planning: Six Mistakes that Could Cost You

estate plan

Procrastination 

Don’t wait for an emergency or crisis to start the creation of an estate plan. By taking time now, you can create a plan that confidently accomplishes your goals to preserve wealth while continuing to provide for those who matter most to you.    

Outdated Plans  

If you made an estate plan several years ago, it is likely out-of-date. The best practice is to review and revise your plan every three to five years or after a major life event, such as a birth, death, marriage, divorce, or relocation. Upcoming changes in tax legislation can also prompt you to revisit your documents.    

DIY Documents 

If estate plan documents are left incomplete or incorrect, this could create complications or confusion for your heirs when you pass. While it may be tempting to formulate an estate plan yourself, there are many components that make up a complete plan. A solid plan consists of more than just legal documents, it should incorporate guidance and knowledge from legal and tax experts – a team of trusted advisors.    

Not Informing Family and Friends 

Communicating your plans with people you trust is essential to help prevent future confusion or conflict between families. Once an estate plan has been drafted, these legal documents should be kept in a location known to those closest to you. You should refrain from keeping these documents in a place that will be hard for others to access after you pass, such as a safety deposit box. Instead, provide copies of these documents to trusted advisors and important family members.    

Missing Key Documents 

Ensure your plan includes all the essential documents:  
  • Last Will and Testament  
  • Beneficiary Designations 
  • Durable Power of Attorney (and Healthcare Power of Attorney) 
  • Copies of Life Insurance Policies and Financial Account Information 
  • Digital Logins and Passwords 
  • Funeral Instructions  
  • Proof of Identity – Social Security Cards, Birth/Marriage/Death Certificates, etc.
  • Deeds or Loans for Large Assets  
 

Appointing the Wrong Executor or Trustee 

One of the most important decisions you will make is choosing the people you will entrust with the responsibility as a trustee. This individual (there could be more than one) will be legally required to secure your assets and distribute them to your loved ones or institutions, as laid out in your plan. It is important to pick an unbiased person who will carry out your wishes without conflicts of interest. Acting as a trustee can be a demanding responsibility; ensure your named fiduciary knows what the position entails and get their permission before assigning this role.    

Be Prepared and Get Expert Advice from Maner Wealth 

Maner Wealth’s experts offer compassionate, estate planning advice and guidance to help you through the process. We’ll help you understand your options, clearly define a plan, and strategize ways to help you avoid common estate planning mistakes.  If you have questions or need estate planning help, please reach out to us at maner@manercpa.com or by calling us directly at 517-323-7500.