No one likes to think about the time after they or their loved ones pass away, but it’s important to plan for the inevitable. If you have even one item of value, whether it’s your home, the money in your account, or family heirlooms, you’ll benefit from having an estate plan in place. Doing so will give you (or your loved one) control over how you want your assets handled, and can save your family members from unneeded stress down the road.
Though it can be hard to know where to begin, we’ll start you off with what not to do when it comes to the Estate Planning process. We gathered up the 5 most common mistakes that are made, and provide you with advice on how these mistakes can be avoided to make the process a little easier.
1. Not having an estate plan
The biggest mistake you can make? Not having an estate plan to begin with. It’s a common misconception that estate planning is only for the wealthy, but this simply isn’t the case. No matter what your financial situation is, an estate plan allows you to have a plan in place after your death. It doesn’t just determine what happens to your money and property when you pass on. An estate plan can also help you set up a living will if you have an accident that prevents you from vocalizing your decisions, designate a guardian if you have children who are still minors, and allow you to preplan your funeral arrangement—making it easier on your loved ones.
2. Not having a will
While a will can exist on its own without an estate plan, this isn’t recommended. Not having a will at all is an even bigger mistake. Not only does it protect your loved ones and legal assets and give instructions on how you want things handled after you pass on, it will also prevent your estate from having to go through a lengthy probate process. While all estates are legally required to go through this process, having a will makes this process go much more quickly as it details how you want your estate (your money and your property) divided.
3. Choosing the wrong trustee
It’s important to remember that the person you name as trustee will be managing both your money as well as your family’s well-being. Your first instinct may be to name someone close to you, like a spouse, sibling, or child. However, it can be better to have an objective third party, or a hired trusted professional as your trustee, so any potential family disagreements can be avoided.
4. Failing to regularly review documents
Have an estate plan in place, but can’t remember the last time you reviewed it? It’s important to change that as soon as possible! Most attorneys recommend that you should review your plan every 3 to 5 years to make sure everything is up to date. Your will also applies here. With the passage of time comes change. Whether it’s births, deaths, marriages or divorce, reviewing your will and your overall estate plan ensures that you have the ideal trustee, and that both your personal and financial affairs will be handled correctly.
5. Forgetting to plan for disability
An estate plan doesn’t just apply to the time after you’re gone, it can also come into play if you have an accident or develop a disability that prevents you from making important financial or health related decisions. Having a power of attorney (the person who will make medical decisions for you in an emergency) is never a bad idea. Encouraging your loved ones to set up a power of attorney for both finances and healthcare while they’re healthy can save a lot of stress and heartache down the road.
While it’s difficult to think about aging, and planning for the time after you or your family members are no longer here, doing so is important and will result in less stress in the long run. Part of this process includes preparing for the time when you or your elderly loved ones may need additional care. With over 2,500 dedicated caregivers, and 19 specialized programs and facilities, Loretto is here to help. We’re committed to providing the best care and improving the lives of all who use our services.
Seeking care for you or your loved ones? Contact us to learn how we can help!