After creating an estate plan, it can be easy to set it aside without a second thought. However, it is important to revisit your estate plan periodically to check for hidden errors or changes in circumstance that could undermine your intent. The following examples are just a few of the numerous estate planningmistakes that can occur every day.
Naming the Wrong Beneficiary on Your Retirement Plan
Many people make the mistake of forgetting or neglecting to update the beneficiary designations on their retirement plans as their circumstances change. For instance, young adults often list their parents as beneficiaries on an IRA or 401(k) early in their careers, when many are single and childless. As they progress through their careers and start families of their own, these individuals often forget to change their beneficiaries to their spouse or children — especially on plans from previous employers. Similar mistakes can occur after a divorce, when people often forget to remove an ex-spouse as a beneficiary.
Listing the Wrong Guardian for Your Children
If you don’t specify who should care for your children in the event of your death, a court may end up making that decision for you, and it may not choose the guardian you would prefer. To make sure that your children will be well cared for by someone you know and trust, be sure to designate a guardian in your estate plan.
Equally important as naming a guardian is reviewing the decision on a regular basis to confirm that the guardian you selected is still the best choice for your children. For instance, if the person you previously designated has since moved away, you may wish to name someone else as the guardian of your children.
Not Planning for Disability
A well-crafted estate plan addresses your wishes not only for your loved ones after your death, but also for yourself in the later years of your life. Be sure to include the following documents in your estate plan:
- A living will, which outlines your wishes for your health care in the event of incapacity
- An appointment of a health care agent, which designates who will make decisions about your health care if you can no longer do so
- An appointment of a conservator, which designates who will make decisions about your finances if can no longer do so
Where estate planning is concerned, the biggest and most common mistake of all is putting it off until it is too late. For assistance creating, reviewing or updating your estate plan, contact an experienced estate planning attorney.