By Sarah Stewart Legal Group
Estate planning is a topic a lot of people try to avoid, despite all the sage advice otherwise. Though statistics vary, the consensus is only about 50% of people have actually planned for their family’s inheritance after their deaths.
Adults with children younger than 18 years of age, arguably the people who need to plan the most, have the lowest rate of planning- 36%.
Estate plans help families decide what assets go to whom, when, where, and can possibly save thousands of dollars in attorney and court costs. Planning is important for everyone, and it must be done correctly to meet your goals.
Here are 5 common mistakes you should avoid when estate planning.
(1) Not Planning
The difficulty of talking about death and working through a plan make people put off estate planning. While you’re waiting for the right time, life, and death, can happen. If you die without an estate plan, the state decides who gets what, while your family is out thousands of dollars in court fees and attorney costs to get the state to divide your assets.
If you’re married, and you don’t have an estate plan, your spouse will not receive everything you left behind. If you have children from a previous relationship that are not 18, and your previous partner survives you, your previous partner will receive your assets to manage for your children. Are you comfortable with that? If not, you need to make a plan. Now.
(2) Forgetting Health Care Directives
Advance Directives for Health care are the only documents in the state of Oklahoma that gives someone the authority to withhold life-sustaining treatment on your behalf. If you have certain situations where you would not want to be on life support, you need an Advance Directive in place.
Another important health care document is the Durable Power of Attorney for Health care. If you are in a situation where you cannot make decisions for yourself, the Durable Power of Attorney will name someone you trust to make those decisions for you.
(3) Not Choosing a Guardian for Your Kids
If you don’t have an estate plan, and you have young children, you have not named a guardian for your children if something happens to you. Your family will have to go to court, and possibly argue with other family members, to get guardianship of your child. And, the guardian may wind up being someone you wouldn’t want.
Remember when picking your guardian, that though your parents may be your first choice, if your children are older and your parents have health issues in the future, they may not realistically be able to care for them. Consider naming a back-up guardian or co-guardian who is younger.
(4) Forgetting to Update Documents
When big life changes occur- divorce, birth, death, marriage, kids growing up- you should re-evaluate your plan. Is everything the way you want it? Has anything changed? Documents are easy to amend if your plans change, but you have to stay on top of things.
(5) Incorrectly Titling Assets
Some people take the time and money to set up a trust, but forget to put their assets into the trust. A trust is only as good as what you put in it. Be sure to talk to your banks, financial planners, employers, and other asset holders to get your assets put into your trust.
If you don’t have an estate plan in place, or need to update yours, reach out to a professional today!