Spiro J. Verras Blog

Tuesday, October 18, 2016

Common Estate Planning Mistakes

How can I avoid mistakes in my estate plan? 

Many people have heard of the term "estate planning," but may not understand what it means. Put simply, estate planning is about getting your affairs in order, protecting your assets, and providing for your loved ones. Although there is at present a wealth of information right at our fingertips by way of the internet, this is not a reliable source for estate planning insights. And the sad fact is many individuals are poorly advised and misinformed. Let's take a look at some common estate planning mistakes.

No Will

A will is the most basic estate planning tool that enables you to decide how your property will be distributed after you die. For those with minor children, a will is the only way to nominate someone to act as their guardian in the event you pass away. Many individuals mistakenly believe that they do not need a will because they don't have a lot of assets, are unmarried, or don't have children, and some estimates are that 64 percent of Americans don't have a will. By failing to create a will, however, the courts will make these in a way that does not agree with your wishes. The bottom line: everyone needs a will.

Failing to Update a Will

Creating a will is not a "one and done" situation. Once your will is in place, it may need to be updated from time to time to reflect changes that occur during your lifetime: buying a home, getting married, having children, getting divorced, and so on. It is crucial to update your will so that it addresses these changes and that your beneficiary designations are up to date. Some observers suggest reviewing your will every two years.

Incapable Heirs

While we like to think that our heirs are deserving and have the emotional and financial capacity to manage their inheritance, this is not always the case. Some may not understand financial matters, others may be spendthrifts, or there may be underlying drug or gambling problems. In these circumstances, a will should appoint a professional to supervise these assets and protect these individuals from squandering an inheritance.

Appointing the Wrong Executor

It is common for many individuals to select a close relative or trusted friend, but choosing the wrong person to act as executor could lead to a will contest, and unnecessary delays and costs. It is important to select someone who has the skills, good judgment and integrity to fulfill this responsibility.

The Takeaway

For those who don't have a will, the time to start an estate plan is now. At the same time, having a will is only the first step, and there are a number of estate planning tools that can help protect your assets and ensure your wishes are carried out. By engaging the services of an experienced estate planning attorney, you can avoid these common estate planning mistakes. 

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