Having a well-thought-out estate plan in place is one of the most beneficial gifts you can give to yourself and to your loved ones. Whether you are creating your initial plan or updating your estate plan, you obviously want to avoid making mistakes. To help you, a Grand Forks estate planning attorney at German Law discusses common estate planning mistakes.
- Procrastinating — you do not need to reach a certain point in your life, or achieve a certain material success, before the need for an estate plan materializes. While it is true that as your family and your estate grow, you will need to build on your basic estate plan to accommodate that growth, every adult should have at least a basic estate plan in place.
- Appointing the Wrong Fiduciaries — the Executor of your estate, the Trustee of a trust, and an Agent in a Power of Attorney are all examples of fiduciary positions. While your initial thought may be to appoint a spouse, friend, or family member to one of these positions based solely on the fact that you trust that person, take some time to think about the duties and responsibilities of the position before making your final choice. Fiduciary positions often require legal and financial knowledge and experience that should prompt you to think carefully about who you appoint to the positions.
- Failing to Plan for Incapacity — a comprehensive estate plan should plan for the possibility of your own incapacity. You stand a one in five chance of suffering a period of disability lasting five month or more prior to reaching retirement age. If you do suffer a period of incapacity, who will make personal and healthcare decisions for you? Who will take over control of your assets and finances? Absent an incapacity plan a judge may be the one answering those questions.
- Forgetting to Update Your Plan — as your life changes and evolves, so should your estate plan. During your working years you should routinely review and revise your estate plan every three to five years. Once you retire you can stretch that to every five to eight years. Certain life events also call for a more immediate revision of your estate plan. Marriage or divorce, for example, should prompt an immediate update to your plan as should things such as retirement, a move to a new state, the birth of a child, or the death of a fiduciary.
- Not Discussing Your Plan — a common reason for probate disputes is surprise. When beneficiaries and/or heirs are surprised about the terms of an estate plan, their first reaction is often to contest the Will or otherwise initiate litigation. Discussing the basic terms of your plan with those who will be impacted by the plan is one way to decrease the likelihood of disputes during the probate of your estate. Drafting a “Letter of Instruction” is another option. A Letter of Instructions is simply a letter that you include with your estate plan that includes additional information not found elsewhere in your plan. You can use it to explain why you included certain terms or bequests in your estate plan.
Contact a Grand Forks Estate Planning Attorney
Please join us for an upcoming FREE seminar. If you have additional questions or concerns about how to avoid making mistakes with your estate plan, contact a Grand Forks estate planning attorney at German Law by calling 701-738-0060 to schedule an appointment.