1. Failing to Plan
The biggest mistake you can possibly make when it comes to your Estate Plan is simply not making the time to do it. Unfortunately, it’s something too many of us put off. But failing to prioritize your plan, or not ensuring it’s complete, ultimately means you’re risking the financial future of your estate, your legacy, and most importantly, your loved ones.
The Fix: If you haven’t yet started your Estate Plan, if it’s been more than 5 years since you’ve updated it, or if you’ve recently had a major life event, take the time to sit down and either get started or review your plan.
2. Not Discussing with Family and Friends
Of course there are exceptions to this rule, but if possible, it’s a good idea to have a conversation with your friends and family. Setting expectations now, where there is an opportunity for discussion, if needed, could lessen the likelihood that there is any contention or disagreement after your passing. If this isn’t an option, there’s language you can write into parts of your Estate Plan that specify anyone who contests anything could be written out.
The Fix: Set aside time in advance to discuss your plan with your spouse or anyone you’ve named Executor or Trustee, and think about notifying specific people you name in your Will or Trust.
3. Naming Just One Beneficiary
You should always have more than one beneficiary designated for any of your assets. In the event that a beneficiary passes away before you do, you’ll want to have what’s known as a contingent beneficiary. This is who would be next in line to your estate or any given asset. Ideally, you should have more than one contingent beneficiary listed.
The Fix: For each asset, account, or policy, be sure to list a primary and one or more contingent beneficiary.
4. Forgetting about Power of Attorney
or Healthcare Representatives
Naming a Power of Attorney (either medical or financial) and/or a Healthcare Proxy is important, as these are the people who would step in to make decisions should you become incapacitated. Note that in most cases, these roles dissolve upon your passing.
The Fix: If your Living Will doesn’t designate a Power of Attorney or a Healthcare Proxy, make sure you have standalone documents that appoint a trusted person or people to make important financial and medical decisions for you.
5. Forgetting about Final Arrangements
Your loved ones will be grieving after you pass away, but planning in advance what you’d like to have happen (in terms of your funeral or burial arrangements) can be a blessing for those you leave behind. Another important component to this is making sure your wishes for end-of-life care are known (i.e. hospice, assisted living, etc.).
The Fix: Think about how you’d like your life celebrated and what type of funeral, memorial, or burial you want. Put that in writing so your loved ones know exactly what they can do to honor you. Likewise, end-of-life planning documents can be included in your Estate Plan too. All of this ensures your final wishes will be respected, while alleviating just a little bit of stress for those grieving your loss or struggling to know what you would want.