Creating a well thought out estate plan is one of the best gifts you can give to yourself and to your loved ones. If you are new to estate planning, however, it is easy to make a mistake. In an effort to prevent you from making one of those mistakes, the Lincolnshire estate planning attorneys at Hedeker Law. Ltd. discuss the top estate planning mistakes.
Waiting Too Long to Start Planning
One of the biggest misconceptions when it comes to the need for estate planning is the idea that you need to reach a certain point in your life or you need to achieve a certain material success before the need for an estate plan really kicks in. 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 east a basic estate plan in place. A basic plan, usually consisting of a Last Will and Testament and one or two other estate planning documents, prevents you from leaving behind an intestate estate should something happen to you. It also allows you to decide who will oversee the probate of your estate and provides you with the only official opportunity you have to let a judge know who you would want to be the guardian for your minor children if one is ever needed. Don’t put off creating your estate plan.
Appointing the Wrong People to Fiduciary Positions
Throughout your estate plan, you will likely have several opportunities to appoint 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 a spouse/friend/family member doesn’t have, making them a poor choice for the position after careful thought.
Forgetting about the Possibility of Incapacity
When you think about the need for estate planning you likely think in terms of planning for your eventual death. While your estate plan certainly should do that, a comprehensive estate plan will also plan for the possibility of your own incapacity. Moreover, incapacity is not limited to old age. You stand a one in five chance of suffering a period of disability lasting five months 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 – and you may not like the answers.
Failing to Review and Revise Your Estate Plan
Your estate plan is not something you should create and then forget about if you want a plan that actually works. Just as your life doesn’t remain static, neither should your estate plan. As you grow and change, so should your 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 Explaining Your Plan
Probate disputes can occur for numerous reasons; however, a common theme 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 ahead of time is one way to decrease the likelihood of disputes during the probate of your estate. If you don’t want to go that route because you believe it might cause disputes now, 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. In this case, the letter might offer explanations for the decisions you made in your estate plan, making litigation less likely.
Contact Lincolnshire Estate Planning Attorneys
Please feel free to download our FREE estate planning worksheet. If you have questions or concerns regarding estate planning, contact the experienced Lincolnshire estate planning attorneys at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.