You take the time to create an estate plan with the hopes that upon passing, your assets are distributed as you had indicated in your estate plan. Unfortunately, not all estate plans are created equal and consequently, a poorly created estate plan could become more contrary to your intended wishes than no plan at all. Drafting an estate plan is a great way to ensure that your assets transition upon death in a manner consistent with your goals and wishes, however, a poorly executed plan can result in unexpected consequences and prove disastrous for your family and your estate.
The following tips can help you avoid common pitfalls in estate planning and may provide you with the peace of mind that undesirable consequences will not result from your good intentions:
1. DO NOT ATTEMPT TO CREATE YOUR ESTATE PLAN ON YOUR OWN
Drafting an estate plan can be a tedious process and only an experienced estate planning attorney can help you put together a plan that will accurately reflect your wishes and provide protection from creditors and taxes. To avoid unintended consequences as a result of poor planning, it is best to not create your estate plan alone. A qualified attorney drafting your plan can prove invaluable to preserving your estate for the intended beneficiaries.
2. BE PROACTIVE IN YOUR ESTATE PLANNING
Drafting an estate plan is only the first step of the process. The best way to avoid pitfalls in estate planning is to remain proactive in the planning while you still can. Your estate planning decisions ought to be revisited over time to ensure that evolving goals, objectives, and family circumstances are considered throughout the course of time. For example, you will want to make sure your beneficiary designations are current, especially after a marriage, divorce, or other major life events. The last thing you want is for an unintended beneficiary to receive all your assets because you did not have an up-to-date estate plan. In order to avoid any pitfalls that may accompany an outdated estate plan, the planning process should be ongoing and should reflect any major changes in circumstances.
3. BE OPEN ABOUT YOUR ASSET DISTRIBUTION
A carefully drafted estate plan can be one of the most significant gifts you can give to your loved ones. Therefore, it may be beneficial to inform them about the process and your intentions. While it is not necessary for your loved ones to know every detail of your estate plan, letting them know that a plan encompassing your final wishes exists may prove beneficial after your passing. For example, you may want to inform your beneficiaries of assets you desire for them to have. Many families may find it difficult to address the subject of estate planning, however, discussing the subject is important because open discussions may avoid misunderstandings between beneficiaries after death.
4. CONSIDER ALL ESTATE PLANNING INSTRUMENTS
Wills, trusts, and powers of attorney are just some of the estate planning documents of which you should be well informed. Estate planning can serve your family after your death, but can also prove helpful while you are alive. For example, a will is effectuated upon your passing while a trust and power of attorney, by contrast, can be useful during your life. Knowing the differences between these items may prove to be crucial in your estate planning decision-making process. Consequently, an estate plan can protect you and your family in the event of hospitalization, incapacitation, or death, making the financial and emotional implications of different estate planning items crucial to the entire process.
Basic estate planning is critical for everyone and it is necessary that such planning is done in a careful, thoughtful, and thorough manner in order to minimize the likelihood of unintended consequences. One of the benefits of estate planning is that your wishes may be fulfilled in the least costly manner, both financially and emotionally. These tips will assist you in accomplishing just that. To protect yourself and your family from pitfalls that can be avoided, do not hesitate to contact the experienced estate planning and probate litigation attorneys at Chepenik Trushin LLP for an initial consultation.