7 Common Estate Planning Mistakes

by Norris Law Group on November 28, 2014

Estate planning. It’s easy to put off in many families, especially in young families. But life (and death) can have a way of sneaking up on people in the most unexpected ways, and delaying the creation of an estate plan can result in a whole host of problems. Investment website LearnVest offers a list of seven mistakes that many families make when it comes to estate planning—along with advice on how to avoid them.

“Mistake #1: Assuming that Estate Plans are only for the Wealthy.” You don’t have to have vast amounts of wealth to need a solid estate plan. Everyone needs to work out how they would like their assets distributed in the event of their passing, and having financial and medical powers of attorney set up and decisions made about end-of-life care is a good idea for everyone.

“Mistake #2: Thinking your Finances are Too Simple for an Estate Plan.” Finances are rarely simple.  Everyone should establish protections to ensure that his or her final wishes are known to potential heirs.

“Mistake #3: Putting Off Estate Planning for Too Long.”  Estate planning can alleviate stress on your family at an already difficult time, and can help maintain relationships among your heirs after you are gone. For example, if you become disabled or incapacitated and can no longer make decisions for yourself and did not set up powers of attorney ahead of time, your loved ones may need to go to court to establish a guardian or conservator for you. Rather than worrying about legal matters, they should be focusing on you and your care.

“Mistake #4: Neglecting Your Digital Assets.” If you are reading this, you know how to use the Internet. Do you also use social media accounts such as Facebook, Twitter, Snapchat, YouTube, Instagram, etc.? If so, you should take steps so your family knows what to do with these digital accounts in the event of your passing. Travis Freeman, President of Four Seasons Financial Education, advises, “Don’t forget to tell your spouse, partner or close family member about your digital assets.” This may include arranging the transfer passwords for online bank accounts or digital copies of documents on your computer or in “the cloud” on sites like Dropbox. Freeman adds, “Going green is a noble task, but don’t let it put your estate plan at risk.

“Mistake #5: Not Preparing for ‘What-If’ Scenarios.” Divorce, addiction, abuse, natural disasters—any or all of these can affect a family unexpectedly. A solid estate plan can help reduce the chance that even more financial problems may affect your family after a life-changing event.

“Mistake #6: Forgetting about Man’s Best Friend.” In the eyes of the law, pets are personal property, and it’s a good idea to outline whom you would like to be responsible for them if you are not around to look after them. Pet trusts can help you set aside money for your pet’s care. If necessary, the trustee can distribute funds to your designated caretaker, along with instructions about how you want your pet’s needs to be managed.

“Mistake #7: Not Putting Enough Thought into Naming a Trustee.” Choosing someone to manage your affairs is no small task. Don’t want to choose for arbitrary reasons, such as asking your oldest child simply because he or she is oldest. Always remember that your trustee will manage your finances and your family’s well-being. Discuss your decisions with everyone concerned, and have a “backup” person in mind if your first choice doesn’t meet your expectations.

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County, UT and throughout Utah, Wyoming and Idaho. Contact them today at 801-932-1238 or online for a free consultation.

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