The percentage of Americans, especially those age 70 and over, with estate documents is in decline. Talking about death is uncomfortable (cue the scene from the Barbie movie), and this is a main reason why many people delay doing something that is so important. But, even those who do have at least a Will, can still commit estate planning mistakes. Learn how to create and preserve meaningful documents that will truly give you a voice now and in the future, as well as peace of mind.
Estate Planning Mistake #1: Not having the right (or all) documents you need
Anyone over the age of 18 can and should have an estate plan. The average person typically just needs the following:
- Will – details who receives your property and belongings after you die (beneficiaries), how that property is distributed and who can act on your behalf (fiduciaries); if you have children, you should also determine who should care for your children in the event a guardianship is needed.
- Durable Power of Attorney (POA) – designates powers to allow someone else (Agent) to act on your behalf with respect to your property and finances.
- Health Care Directive Living Will – names an Agent to handle your medical affairs, generally in effect only upon your incapacity.
Those with special needs children, high net worth, or blended families may also benefit from a Trust. While a Will is the most common document, having all three of those noted above truly provides coverage for most aspects of your life.
While there is the opportunity to create estate documents online, there are pitfalls to using software or templates, primarily that they don’t give advice like an estate attorney does, ensuring you’ve covered all necessary aspects of your life and abided by state-specific laws. It’s wise to employ an attorney to help you draft, finalize and properly sign and file your estate plan. 
Estate Planning Mistake #2: Improperly executing or losing documents
Unfortunately even the best laid (estate) plans can fail if you don’t have them properly executed or lose the originals. In fact, if you pass away, and the original copies of your estate documents cannot be located, your estate plan may be invalid. This means your estate would fall under PA intestacy laws, dictating how your property is divided up and to whom, not necessarily in accordance with your wishes.
What should you do with your signed estate documents? Some estate attorneys will keep a copy or possibly the original for you, depending on your needs. If you keep the originals, it is wise to have them in a safe place such as a fire-proof safe at home, in a secure safety deposit box at a bank, or with a trusted family member.
Additionally, an estate attorney will make sure your documents are finalized with proper signatures. While a Will needs to be signed by you, the signature of witnesses is not required in some states; however, having witnesses present and signing in the presence of a notary makes the Will more likely to be upheld as valid. POAs and Living Wills do need to be signed in the presence of two witnesses and a notary to be valid.
Estate Planning Mistake #3: Trying to avoid probate or being inconsistent across documents
Assets like life insurance and 401(k) plans allow the owner to designate beneficiaries, to whom these accounts are payable upon your death. These are considered “non-probate” or “transfer upon death” accounts that supersede the terms of a Will. Beneficiaries do not have to wait for the policy to pass through probate, the legal process that takes place after your death to finalize your estate. Avoiding probate is not necessarily a good idea, and working with legal counsel to discuss beneficiary designations is an important part of the estate planning process.
Life happens – death, divorce, and more – sometimes forcing you to update your beneficiaries. It is important to keep your estate plan fresh (more on that below), and the beneficiaries of non-probate property updated.
Some people try to pass on their assets by beneficiary designation in the misunderstanding that this avoids inheritance tax. Unfortunately, this often leaves the estate unable to pay for administration costs like funeral expenses, debts, credit card bills, etc.. In some cases, beneficiaries of non-probate funds have had to pay back creditors when the estate can’t otherwise be settled.
Estate Planning Mistake #4: Set it and forget it
You may feel like a burden has been lifted off you once you complete your estate plan. However, similar to keeping your beneficiaries current and consistent across documents, it’s important to review your documents every few years.
Several life circumstances that might require an update to your estate plan:
- Birth of a child or grandchild – adding guardianship; ensuring a child or grandchild receives the appropriate share of your estate; possibly keeping assets in trust for a beneficiary.
- Divorce (yours or a person who is named in your documents).
- Change in health – if you have been diagnosed with a serious illness (that has not impacted your mental faculties), it’s prudent to review your documents, notably your Living Will to ensure your wishes are followed should you become incapacitated.
- Move to a new state – every state has its own estate/tax laws that impact how your assets are distributed; be sure to look into this upon a relocation and update your documents accordingly.
While these are only some reasons to update your estate documents, it’s a good rule of thumb to do so every few years, regardless of major life changes.
How to avoid estate planning mistakes
Perfect is sometimes the enemy of good. Beyond wanting to avoid the grim topic of death, many people, especially young adults, struggle with making guardianship decisions for young children. While these are difficult decisions to make, your estate plan gives you the opportunity to express your wishes for all stages of life, including beyond the grave.
You can avoid estate planning mistakes like these and others by working with an experienced estate attorney to create a meaningful plan that protects you, your assets, and those you love most. Contact a member of our team to schedule an appointment and get started on yours today.
