Estate planning can provide peace of mind for you and financial security for your loved ones—but only if it is properly handled. Mistakes in the process can rob you of a peaceful mindset and leave your family members to untangle unintended complications. You can help to ensure a successful process by avoiding these three common mistakes:
Failing to update the plan
Have you been through any major life changes since you first created your estate plan? A divorce, adoption and many other circumstances may render your existing documents inadequate.
Without having your will, trusts, powers of attorney and other elements of your estate plan reviewed, you may not know if they are offering you the benefits you think they are. Make sure to review often-overlooked items like updating your beneficiary designations in employer-provided life insurance and accidental death and dismemberment coverage.
Choosing the wrong representatives
A friend or family member may seem like the perfect person to serve as your power of attorney or personal representative, but a closer look may reveal that someone else is better suited to the job. Remember that when you choose someone to advocate for your best interests, they should have certain qualities such as trustworthiness, good communication skills and the ability to stand their ground in the event a dispute should arise. It should be someone you know well enough to trust they will make the decisions you would make if you were able to do so. More pragmatic concerns include choosing someone who is financially secure and local.
Do-it-yourself estate planning documents
Estate planning is far more complex than purveyors of DIY document services may have you believe. A fill-in-the-blank approach to wills and other important documents often results in errors, oversights and missed opportunities.
For instance, you may inadvertently create a will with two or more contradictory clauses, leaving your loved ones mired in uncertainty and even conflict. These errors would instantly draw the attention of an experienced estate planning lawyer, but whatever program you use to create them may very well let them pass, leaving you with a false sense of security.