All California adults should consider creating an estate plan. However, you should know about the most common estate planning mistakes and how to avoid them.
Not having an estate plan
The biggest mistake you can make is not having an estate plan at all. If you die without one, your loved ones will be left scrambling to manage your estate, assets and property. Your family has enough to worry about dealing with their grief after your loss. Creating an estate plan is the best way to safeguard them and your assets in the future.
Failing to periodically update your documents
Some people make the mistake of failing to periodically update their estate planning documents. Certain circumstances make it necessary to update on occasion. This should include everything from your will, trust, insurance policies, 401(k) or IRA and beneficiary designations. For example, if you have a new baby or divorce and get remarried, you will want to add your child’s name to your documents and replace your former spouse with your new spouse. Not doing these things could result in your property getting into the wrong hands after your death.
Not planning for incapacity
No one should make the mistake of not planning for incapacity. Anything could happen to anyone. You could be rendered incapacitated after an illness or serious accident and be unable to express how you want your medical care to be carried out. Always include powers of attorney and a health care directive. You can name agents in those documents who can ensure that your wishes are met.
Failing to fund your trust
If you create a trust, don’t forget to fund it with assets that are retitled in its name. This seems like an obvious mistake, but some people establish a trust and then forget to take those next steps.