Estate planning can provide both financial security and peace of mind. Unfortunately, most people do not consider the economic impact of a severe or fatal accident, serious illness, or sustaining a debilitating injury. However, unexpected incidents such as these often do arise unexpectedly, and therefore it is essential to have an estate plan in place. This article provides a few common estate planning mistakes to avoid.
Mistake #1 – Failing to Incorporate All of the Essential Estate Planning Tools
Most people simply draft a power of attorney that authorizes an individual to sign important legal documents or create a last will and testament that handles their estate’s assets. While these legal documents are critical components of a comprehensive estate plan, the production of isolated estate planning instruments usually ignores the importance of a comprehensive estate planning strategy that addresses the several issues affected by an estate plan.
A basic estate plan should incorporate the following estate plan instruments:
- Financial Power of Attorney
- Revocable Living Trust and Will
- HIPPA Authorization/Waiver
- Healthcare Power of Attorney or Advance Directives
Mistake #2 – Relying on Do it Yourself Solutions Instead of Hiring Estate Planning Attorney
There are numerous “self-help” estate planning products on the market, including pre-printed forms, software programs, and legal document websites. However, courts have specific guidelines that must be met, and many unlicensed people and companies offer document preparation services without the proper legal training or expertise in tax law, property law, wills and trusts, and other areas of law. Our Columbus estate planning attorney often hears from individuals and families after a “do it Yourself” product has caused unintended, negative consequences. For example, when people rely on document preparation services to draft a living trust, they do not make the appropriate steps to fund the trust. In other cases, the documents have not been executed properly. If a person makes these mistakes, the estate planning documents could be rejected by the courts. An experienced Ohio estate planning attorney has the knowledge and training in the areas of law relevant to an estate plan. They know all of the intricate parts of an Ohio estate plan to prevent unintended, negative outcomes.
Mistake #3 – Not Viewing Estate Planning as a Process
When properly viewed, the estate planning process is an ongoing process. The maximum benefit of an estate plan is only achieved by periodically reviewing and updating the estate planning documents. The following are some developments that may merit a review of your estate planning documents:
- Change in employment
- Divorce
- Marriage
- Adoption or birth of a child
- Adoption or birth of a grandchild
- Retirement
- Responsibility for new dependents
- Formation of a business
- Purchase of a large asset like a residential or commercial property
- Change in financial goals
- Illness or disability of your spouse
- Incurring a significant liability
- Disability of a child or grandchild
- Substantial changes in net worth
- Passing of a spouse or child
The preceding are just a few of the significant life events that might require updating your estate plan. An estate plan still should be re-evaluated on a periodic basis. Our Columbus estate planning attorney at Dawes Legal, LLC can offer assistance with specific estate planning documents or a comprehensive estate planning experience. We invite you to call us today 614-733-9999.