Common Estate Planning Mistakes and How to Avoid Them

Estate planning is something everyone should do to protect themselves while they are living, ensure that assets are distributed according to their wishes after death and prevent families from fighting over estates. A recent article from The Daily Record, “Experts urge early estate planning to avoid costly mistakes,” reminds us we never know when we’ll need our estate plan to go into effect, so having one in place is important.

Remember, estate planning isn’t just about drafting and signing legal documents. It encompasses defining family goals and facilitating conversations to discuss family values and hopes for the future.

Every estate plan needs at least three core documents:

• A financial power of attorney, needed to authorize another person to make financial and legal decisions on your behalf in case of incapacity.
• An advanced medical directive, which gives you the opportunity to express your preferences for medical care, if you’re not able to communicate.
• A last will and testament directing how you want assets to be distributed, naming an executor to administer your estate and naming guardians for minor children.

A common mistake is attempting to use online templates for critical documents like a power of attorney or wills. While it seems convenient and inexpensive, many of these documents fail when reviewed by a court because they don’t follow state law or are contradictory.

An estate plan is a highly personalized document and requires a holistic view of the family’s life and situation. A thorough review of your life, finances and family dynamics is necessary to create an effective estate plan while you are living and after you’ve passed.

Another common error is thinking your family won’t benefit from a trust. However, any family with dependents and assets needs to at least consider a trust. Using a trust can protect your family and your assets from creditors, avoid probate and maintain privacy.

Another mistake is failing to review an estate plan every three or four years. The estate plan might not achieve goals unless it keeps up with changes in tax laws and retirement rules. For example, beneficiaries now have ten years to empty an inherited IRA, when in the past, they had a lifetime to take out withdrawals.

You may want to change your IRA beneficiary if these new rules will create a tax burden for them.

The process doesn’t have to be complicated. However, it does require taking the first step, which is making an appointment to meet with an estate planning attorney. You can anticipate a feeling of relief and peace of mind from knowing you’ve protected loved ones and yourself.

Avoiding common estate planning mistakes ensures that your loved ones are cared for and your wishes are respected. At The Werner Law Firm, our experienced estate planning attorneys in Los Angeles are here to help you create a comprehensive and personalized estate plan. Whether you're drafting your first plan or reviewing an existing one, we’re ready to provide the guidance and expertise you need.

If you have any questions, schedule a free appointment with us through our online appointment page.

You can also read reviews from some of the hundreds of clients we have helped over the years.

Reference: The Daily Record (Dec. 17, 2024) “Experts urge early estate planning to avoid costly mistakes”