Five Common Estate Planning Mistakes To Avoid

Estate planning can be a daunting prospect for many people, both logistically and emotionally. Due to the very nature of estate planning, however, putting it off too long can have disastrous consequences — so it is never too soon to begin the process. Whether you are just starting to plan your estate or already have a plan in place, you can help make sure it is as effective as possible by taking steps to avoid these common mistakes.

Failing To Plan For Incapacity

People tend to think of an estate plan as something that kicks in after they die. While this is true to a large extent, an estate plan can and should also address the issue of incapacity before death.

Incapacity occurs when a person can no longer make important decisions about medical care, finances or other important issues due to a physical or mental impairment, such as dementia, Alzheimer's disease or stroke. In case such a situation should ever arise in your own life, it is important to have a plan in place to help ensure that your affairs are handled according to your wishes.

Planning for incapacity can also help minimize strife and disagreement among your family members and other loved ones, who may otherwise be forced to make difficult decisions on your behalf without knowing what you really want.

There are several different tools available to plan for incapacity in Missouri, and each one serves a different function. These include:

Durable power of attorney. By naming a durable power of attorney, you authorize another person to make financial and legal decisions on your behalf if you become incapacitated.

Health care power of attorney. You can use a health care power of attorney to appoint a trusted individual to make decisions about your medical care in the event that you lose the ability to make them yourself.

Living will. Also called an advance directive or health care directive, a living will is a document that spells out your wishes about the types of medical treatments you do or do not wish to receive if you become incapacitated.

Personal custodian. In Missouri, you have the option of naming a personal custodian to take care of your home and other real estate or personal property.

Although there are some similarities among these different estate planning tools, they are most effective when used in combination with one another. In addition, as with any other legal document, they are only effective if they are executed in full accordance with the law. Therefore, when putting together a plan for incapacity, it is important to get help from a lawyer.

Waiting Too Long To Plan Your Estate

While discussions of incapacity and estate planning in general tend to focus on older individuals, young people need estate plans too. Even a healthy young adult can become incapacitated by a serious accident or unexpected illness, so it is never too soon to record your wishes about how you would like to be cared for and who you trust to make decisions for you. If you have children, your estate plan can also address the question of who will care for them if you are no longer able to do so.

Likewise, planning for the distribution of your assets is an important step to take at any age, even if those assets are relatively modest. Unfortunately, perhaps because it can be uncomfortable to contemplate, people often put off estate planning until it really is too late. If you die without an estate plan in Missouri, your belongings will be distributed according to a legal principle known as intestate succession, which will not necessarily match up with your own wishes.

Letting Your Estate Plan Fall Out Of Date

Although many people regard it as such, estate planning should not be a "set it and forget it" type of activity. As the circumstances of your life change over time, your estate plan should also grow and evolve to account for those changes. Not only should you review your will regularly to make sure it still reflects your wishes, but you should also check the beneficiary designations on your life insurance, retirement accounts and other assets to ensure that they do not end up in the wrong hands.

At the very least, it is a good idea to review your estate plan every few years, whether or not there have been any substantial changes in your life or assets. This will give you a chance to make sure everything is up to date with current estate planning laws in addition to making adjustments for any preferences you may have about any aspect of your estate plan.

Along with these routine estate planning "check-ups," there are also a number of major life events that should trigger a review of your estate plan. For example, if you get married or go through a divorce, you should be sure to update your estate plan to make sure that it is correct with regard to your new or former spouse. Similarly, you should review your estate plan upon the birth or adoption of a child, as well as after the death of anyone who is a beneficiary of your estate.

Another time that it is important to revisit your estate plan is when your income or other assets change significantly. For instance, if you purchase or sell a home or other real estate, it may affect the manner in which your estate plan operates. Likewise, you should also update your estate plan anytime you sell or acquire business assets, or if any existing assets undergo a substantial change in value.

Failing To Let Others Know About Your Estate Plan

Even the most thorough and thoughtfully considered estate plan is of little use if no one else knows about it. Therefore, it is important to discuss your estate plan with your loved ones so that they know it exists and can refer to it when the time comes.

Similarly, your assets can only be distributed if they can be found and accessed. Thus, your estate plan should include a detailed list of all of your assets and accounts, such as personal property and real estate, bank accounts, retirement plans, investment accounts, life insurance policies and business assets.

Wherever necessary, your estate plan should also provide instructions about how to access these accounts, such as login information and passwords for online accounts. You may also wish to leave instructions for the handling of your nonfinancial virtual assets such as digital music collections, photo albums, email accounts or social networking profiles.

Trying To Plan Your Estate Without Professional Help

People sometimes try to complete their estate planning without help from a qualified professional — often using fill-in-the-blank forms or downloadable software. However, while it may seem like an attractive cost-saving measure in the short term, estate planning is one area in which taking a do-it-yourself approach can be particularly risky.

This is because wills, health care directives and other estate planning tools are governed by a set of highly complex and specific laws that vary from state to state. Without an in-depth understanding of these laws and the ways that they apply to your unique circumstances, it is very easy to make mistakes that could result in your affairs being handled in a manner very different from what you expected. Unfortunately, by the time these issues come to light, it may be too late to correct them.

Therefore, when planning your estate, you should be sure to seek assistance from an experienced estate planning attorney who can help you create an estate plan that clearly and thoroughly reflects your wishes in a legally enforceable manner.

Contact Our Family Law And Estate Planning Attorneys

Protect yourself and your family from potentially costly estate planning mistakes. Call our St. Louis law office at 314-282-8670 or contact us online to schedule an initial consultation to discuss your situation.