Examples of Estate Planning Fails (and How to Prevent Them)
The DIY estate planning option might seem convenient and cost-effective because you’re “just filling out papers.” However, the devil is in the details—and the details of your family’s future should not be left up to chance. Without proper guidance, your plan might cost them more money and time later (without you there to guide them). These examples of estate planning failures can help you prevent similar mistakes and see the difference an experienced estate planning attorney makes.
[TABLE OF CONTENTS]
- 5 Common Reasons Why Estate Plans Fail
- How to Avoid Estate Planning Fails
- A Human Touch for Your Lifetime and Legacy
5 Common Reasons Why Estate Plans Fail
1. Relying Too Much on Your Will
One irony of estate planning is that the one legal document everyone thinks they need most is the one that accomplishes the least. Yes, you need a Will—but a Will alone doesn’t do much beyond tell your heirs where your assets go in the event of your death. Having a Will also won’t keep your family out of court. In fact, it does the exact opposite, because your family must go to probate court to enforce the terms of the Will.
Most importantly, a Will only comes into effect after you die. What if you are incapacitated? If your spouse has passed, where will your minor children go? Will they be sent to a legal guardian or a stranger’s home? There will be more questions than answers, leaving your family confused, frustrated, and digging deeper into their pockets.
Failing to consider the state between life and death is one of the biggest mistakes people make when estate planning. We ensure you complete all documentation necessary for your family’s well being and your end-of-life medical care so your choices will be respected.
2. Assuming Everything Will Go Smoothly After Your Passing
Peace of mind is the biggest benefit of making an estate plan. But what if that calm, peaceful feeling is a false sense of security? You need your plan to work as intended upon your passing, not “hope all goes well” (famous last words in failed estate plans).
We provide the additional service of test-driving your estate plan, examining it from page one as if you were to pass away tomorrow. Are all documents properly signed, witnessed, and notarized? Are there any conflicting or ambiguous provisions? Have you considered the tax implications of your estate? This process allows us to flag any problems and fix them immediately, keeping you safe in the knowledge that your family will be protected.
3. Choosing the WRONG Representative
The wrong documents can cause problems, but there are countless examples of estate planning failures due to choosing the wrong person. The executor or trustee for your estate must be trustworthy, reliable, and willing to serve. Your financial durable power of attorney must be reasonably good with money, and your medical durable power of attorney must be prepared to carry out your precise end-of-life wishes. The wrong people in these roles can lead to costly errors and rifts in families that might never be repaired.
4. Losing Unclaimed Assets
Does your family know the exact location of all your assets? Do they know where your online documents are located? Have you included everything in your name, including that 401k you had while working as a barista in college? If not, your assets could go with the other $50 billion (yes, with a ‘B’) worth in the state’s Department of Unclaimed Property.
An estate planning attorney can help inventory and organize your assets and store a copy of these important documents. This will help ensure your estate’s wealth and heirlooms don’t end up in the unclaimed property pile.
5. Living in a Spiderweb – Family Conflict
The family dynamic can be like living in a spiderweb. Conflicts can be sticky and hard to untangle, especially when spouses have children from a previous relationship. I know about this firsthand because I have a blended family myself. Can a DIY estate planning site sit down and help you avoid potential family conflicts in the future? They can give you the paperwork to fill out yourself, but also tear your family apart when you’re gone. It happens all the time, and can easily be avoided with the appropriate planning.
How to Avoid Estate Planning Fails
If the thought of a failed estate plan is keeping you up at night, there are a few things you can do to help your plan succeed:
- Follow up and file. Go over your documents carefully for any unsigned or undated pages. If there are additional actions you need to take, don’t put them off. Sign and file any other documents besides your Will, and keep your plan in a safe place.
- Inform your heirs. The best way to avoid family conflict is to talk to your relatives ahead of time. Your heirs should have a general idea of the estate’s value, assets, liabilities, and your plan for each. This way, they can express their views while you’re there to quell ill feelings.
- Update often. Your estate plan should be revised whenever there’s a major life change (such as a divorce or acquisition of new assets) and reviewed regularly to ensure your designations still reflect your wishes.
- Work with an attorney. Make it easy on yourself. Use a professional to gather your assets, advise you on tax options, and ensure everything is in order. It’s the only way to trust that your plan will provide for your family when you’re not able to care for them yourself.
A Human Touch for Your Lifetime and Legacy
Nothing is more personal than an estate plan. Our comprehensive planning services safeguard everything you have built and the safety of those you love most, allowing you to be a hero to your family. Email us at [email protected] today or schedule a 15-minute call to discuss how we can help you.