You want to make sure your family is secure when you’re no longer around, right?
Estate planning is crucial to ensure that wealth accumulated over a lifetime is distributed according to your wishes. We’ve seen many folks here in Massachusetts and elsewhere make common mistakes that could have been avoided with the guidance of a good estate planning attorney. So let’s review them.
Mistake #1: Not Having A Will
Many families must endure the red tape and expenses of “intestate” probate because a parent never got around to having a will prepared. The process is relatively straightforward: identify an estate planning attorney and make an appointment. Once the will is completed, make sure several trusted people, likely family members, know where it is and can access it.
Mistake #2: Not Having Adequate Insurance
If the last time you looked at your life insurance coverage was more than ten years ago, it’s probably not kept pace with your life. Although every person’s situation is different, high- income earners, like physicians or other professionals, need to understand that life insurance “replaces” income. This means enough to pay for college, pay off a mortgage and provide for your surviving spouse and children’s lifestyles.
Mistake #3: Not Consulting An Estate Planning Attorney or Financial Advisor
Tax laws are constantly changing, and if your estate plan is not keeping up with those changes, you may be missing out on planning opportunities. Your family also may end up with a big tax bill, if your estate plan hasn’t been revised in the last three or four years. Your team of professionals is only as good as you let them be, so stay in touch with them.
Mistake #4: Not Updating Your Estate Plan
If you thought an estate plan was a set-it-and-forget-it plan, think again. Tax laws aren’t the only thing that changes. If you’ve divorced and remarried, you definitely need a new estate plan—and possibly a post-nuptial agreement. Have your children grown up, married and perhaps had children of their own? Do you have a new and troublesome son-in-law and want to protect your daughter’s inheritance? All of the changes in your life need to be reflected in your estate plan.
Mistake #5: Not Discussing Your Plan With Your Family
No one wants to think about their own mortality or their parent’s mortality. However, if you don’t discuss your estate plan and your wishes with your family, they will not know what you want to happen. It doesn’t need to be a summit meeting, but a series of conversations to allow your loved ones to become comfortable with the discussion and make it more likely your wishes will be fulfilled. This includes your estate plan and your wishes for burial or cremation and what kind of memorial service you want.