To help make estate planning more “user-friendly,” a Londonderry estate planning attorney at DeBruyckere Law Offices explains the top 5 estate planning mistakes most people make and how you can avoid them yourself.
You do not need to reach a certain point in your life, or achieve a certain material success, before the need for an estate plan materializes. While it is true that as your family and your estate grow, you will need to build on your basic estate plan to accommodate that growth, every adult should have at least a basic estate plan in place.
Appointing the Wrong People to Fiduciary Positions
The Executor of your estate, the Trustee of a trust, and an Agent in a Power of Attorney are all examples of fiduciary positions. While your initial thought may be to appoint a spouse, friend, or family member to one of these positions based solely on the fact that you trust that person, take some time to think about the duties and responsibilities of the position before making your final choice. Fiduciary positions often require legal and financial knowledge and experience that should prompt you to think carefully about who you appoint to the positions.
Failing to Plan for Incapacity
A comprehensive estate plan should plan for the possibility of your own incapacity. You stand a one in five chance of suffering a period of disability lasting five month or more prior to reaching retirement age. If you do suffer a period of incapacity, who will make personal and healthcare decisions for you? Who will take over control of your assets and finances? Absent an incapacity plan a judge may be the one answering those questions.
Forgetting to Update Your Plan
As your life changes and evolves, so should your estate plan. During your working years you should routinely review and revise your estate plan every three to five years. Once you retire you can stretch that to every five to eight years. Certain life events also call for a more immediate revision of your estate plan. Marriage or divorce, for example, should prompt an immediate update to your plan as should things such as retirement, a move to a new state, the birth of a child, or the death of a fiduciary.
Not Discussing Your Plan
A common reason for probate disputes is surprise. When beneficiaries and/or heirs are surprised about the terms of an estate plan, their first reaction is often to contest the Will or otherwise initiate litigation. Discussing the basic terms of your plan with those who will be impacted by the plan is one way to decrease the likelihood of disputes during the probate of your estate. Drafting a “Letter of Instruction” is another option. A Letter of Instructions is simply a letter that you include with your estate plan that includes additional information not found elsewhere in your plan. You can use it to explain why you included certain terms or bequests in your estate plan.
Additional resources provided by the author
If you have additional questions about estate planning, contact a Londonderry area estate planning attorney at DeBruyckere Law Offices by calling (603) 894-4141 or visiting www.dadlawoffices.com
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