Estate planning is a topic that some people prefer to avoid. For some, talking about an estate plan means discussing their mortality, and they would rather not do that.
But once you have made the decision to step forward and create an estate plan, make sure to do plenty of research, seek legal guidance, and not overlook certain details.
In its annual survey on estate planning released earlier this year, Caring.com disclosed that only one-third of the 2,600 Americans who participated had any formal estate planning documents. Why do so many not have estate plans? Their reasoning included procrastination, they did not have enough assets, the expense involved, etc.
Here are four things that you must avoid when assembling an estate plan:
- Procrastination: Some people subscribe to the saying “there is always tomorrow” when it comes to estate planning. Do not wait. An abrupt incident may upend your life, ultimately affecting your family. You want an estate plan created by you and filled with your decisions. Dying without a will means that the Commonwealth’s intestacy laws dictate what happens to your assets. As a result, some of your assets may go to an estranged sibling or relative you do not know or wish to inherit from you;
- Not thinking beyond the will: Do not overlook matters such as powers of attorney, naming a legal guardian for your children and an executor, assets that fall outside a will’s realm and even having a testamentary trust included in the will. Two types of powers of attorney – financial and health care – exist. These people make important decisions for you if you cannot do so. Also, name beneficiaries to assets within retirement accounts and life insurance policies as they are not subject to a will. Assets within a testamentary trust do not get distributed to beneficiaries until they reach a certain age that you choose in your Will;
- Failing to talk to your family about your estate plans: Do not keep family members in the dark. This is not the time for any surprises. Let them know of your intentions and what you hope your estate plan can accomplish. Input from them may even lead you to make specific changes. Finally, make sure that your family members know the whereabouts of your estate planning documents; and
- Subscribing to a do-it-yourself (DIY) estate plan: People often choose this route to save on expenses and sidestep having to work with an attorney. However, most of these DIY plans don’t pass muster with the laws of the Commonwealth of Pennsylvania and many are not built for every person’s specific situation. You would benefit from the guidance of an attorney.
By being proactive, thoughtful and understanding that you do not know what you do not know, you can take the necessary steps to create a solid estate plan. You also must understand that an estate plan needs regular attention. Every three to five years, please review your estate plan and provide updates as needed. When life events surface such as a change in marital status, the birth of children or grandchildren or starting a business, you need to update your estate plan. Contact OWM Law Offices for all of your estate planning and general legal needs.