Many persons have the mind of transferring wealth to their love ones, family and friend while they are still alive or at their death. This is a very benevolent mindset. In order to do this, your estate needs to be properly planned. it is your estate that entails how you wish to go about this wealth transfer.
Even with a planned estate, there are still common possible errors which can flaw your whole plan. see some of these errors and learn how you can avoid them.
Not having a will before death
A will is a legal document which entails your intentions concerning how you would want your estate to be shared among your heirs when you pass. Aside how a testator’s wealth should be distributed, a will entails other information regarding the testator’s intentions.
Dying without a will can be very disastrous in many ways. It could lead to a mess in the deceased family. Dying without a will means every of your heir will desire a certain part of your estate since you died without specifying who gets what. Long time grudges could as well be stared up. Dying without a will means your young children (if you have) will be under the care of whoever the court decide.
There are different types of will testators can choose to adopt but, a testamentary will is the highly recognized type in court. A testamentary will is a written will signed by the testator in the presence of witnesses.
Errors in designating beneficiaries
Most people make the mistake of not properly designating their accounts in the case of death. When opening a bank account or brokerage account, you will need to fill in a beneficiary to the account. This is the person that will take charge of the account when you pass on.
The error people make is believing that their will can over rule whoever they filled as their beneficiaries when opening these account. The truth is that a will has no power to overrule this initial decision of the testator.
This is a good reason to constantly update your estate plan and make sure all your documents are in proper alignment with one another.
Failure to plan for incapacitation
Planning for incapacitation is as important as planning a will. In the case of an accident which makes you bed ridden, you will need someone who will be making decisions in your stead. There are two ways to make plans ahead for incapacitation: either by appointing a durable power of attorney or by appointing a health care proxy. These are the persons who will be making financial and medical decisions on your behalf. Without planning ahead for incapacitation, the court will choose a guardian to make decisions on your behalf. This could be disastrous as the court’s choice might not be what you would have wanted.
Attempting to do it yourself
While planning your estate, it is very important for you to consult an attorney. Most people make the mistake of trying to file this document themselves. They probably go online, make research and think that will be enough. Truth be told, this is where most estate planning errors happen.
When you are ready to plan your estate, get a good attorney to advise you and guard you through each step to avoid making irreversible errors.
Failure to update your estate plan
Updating your estate plan on a regular basis say, every two or three years is very necessary. This is because changes in family structure or Government policies might render your initial plans invalid.
It is advisable to update your estate plan after every major change in your family structure in order to avoid future regret.
Failure to plan for descendants of a previous marriage
This can be a very bad mistake and it can have a very bad effect on the descendants of a previous marriage. It can even leave them with no penny after the death of a parent. After a divorce, you should consider making plans for your descendants in the previous marriage so that they won’t be exempted from your inheritance.
Hiding certain details from your estate planner
Keeping secrets from your estate planner is a very bad idea. For they to properly plan your estate, you have to open up to them completely else they won’t get enough information to properly plan your estate.
In order to avoid making these mistakes it is important you consult an attorney. Our office is always open for hire and consultation.
