Have You Made These Estate Planning Mistakes?

If you don’t have a will, durable power of attorney and health care proxy (or advanced health care directive), you’ve made the first estate planning mistake. You need these three (3) documents to protect your family and your assets in the event you are incapacitated and for when you die.
Have you made any of these other mistakes?

1. You have not updated your will in 20 years and are not even sure where it is located.

Most people’s life circumstances change and their estate planning needs are no different. You should at least have your estate planning lawyer review your estate planning documents every 2-3 years to make sure that the documents still carry out your wishes and to ensure that changes in the estate tax laws do not mean that you will be paying federal or state estate taxes that were not in effect when your will was originally drawn up and you owned fewer assets. If you don’t know where your will is located, it is as if you never wrote one. Get a new one done and place it in a secure place. Make sure your executor knows where the will is kept.


2. You rely on joint tenancy as an estate planning tool, especially adding your children to your deed or bank accounts.

Joint tenancy can create problems you have not thought of. Frequently, you think of adding a joint tenant as a way to avoid probate. It does accomplish that goal when you die, but there are immediate consequences while you are alive. Although you may have added a child or all of your children as a convenience but they have full ownership interests and can thwart your needs and desires while you are alive.

3. You did not provide for a successor in interest if one of your fiduciaries dies before you or cannot serve.

If you have not named successor executors, trustees, health care proxies, and agents-in-fact, you may wind up having named none of those critical fiduciaries. Suppose you named your spouse as your executor, if you are both in a car crash, you die and he is unconscious, then he cannot act as your executor. If you haven't named a back-up, then the court can appoint whoever it thinks is most appropriate, even if you would have hated that choice. If your son is named as a trustee for your grandchildren’s trusts and he dies before you, then when you die, any interested person can petition the court to act as trustee. You must name at least one and maybe two backups in case there is a nasty surprise when you need these persons to act on your behalf.

4. You have a will but no advanced health care directive or durable power of attorney.

With all of us living longer than ever, many of us are also living in an incapacitated state longer. There are more Alzheimer’s disease patients, more cases of senior dementia, and more years of just slowly getting more frail and unable to take care of ourselves. We can’t pay our bills, decide whether we are unable to live on our own, or make the proper health care decisions. You may unexpectedly suffer an early heart attack, stroke, or be in an accident. Every person over the age of 18 needs a will, durable power of attorney, and advanced health care directive. You don’t have to be an old person to need someone to help you out when you can’t act for yourself.

There are many other estate planning mistakes that can cost you in time, stress, and money. Consult an estate planning lawyer to help you create your estate plan, have your estate planning documents signed, and have them reviewed every few years. That way, you will protect yourself and your family the way you would want to.