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Dave’s Rules for Life: Most Common Estate Planning Mistakes

At Carter Law, we know that Your Legacy Goals are to share your love, value, and wisdom, even in the event of your death or disability. You want to create a plan that keeps your loved ones out of court and out of conflict. Make sure you avoid these common estate planning mistakes:

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 estate 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

2.  Not sharing your plan with your loved ones.  Of course there are exceptions to this rule, but if possible, it’s usually a good idea to have even a brief 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.

3.  Forgetting about your Power of Attorney,  or Healthcare Representative.  If you become disabled, even temporarily, you need someone to speak for you. While you are sidelined, the world continues to move on. Your financial life must continue, and decisions may have to be made regarding your assets and finances. Decisions also have to be made about your care during your period of disability. Without a power of attorney, your loved ones would need to file a petition and ask a court to give someone the power to manage your finances and healthcare for you.

4.  Forgetting about Your Digital Assets. Digital Asset Planning is relatively new, but it is necessary in an increasingly digital world. Be sure to include a Digital Estate Plan that lays out how you’d like all your digital assets to be handled after you pass away. How do your loved ones handle your emails or social media accounts? What happens to your digital currency or This could be anything from social media accounts, online banking, cryptocurrency, non-fungible tokens and more.

5. Not Thinking about Your Children’s Futures. While your directions may be well-intentioned, there are cases where how you word things could come back to haunt your children or heirs. If your children are very young, you may want to include directions for how their guardian should spend assets, either to take care of them, or to benefit them in other ways.

Other missteps could include assuming your children will want something, when in fact they may not. For example, you might intend on passing down a vacation home that’s been in your family for generations, with the stipulation that it could only be sold if every child is married with their own vacation home. But what happens if one of the children doesn’t want to get married? Or doesn’t want to be a homeowner? In these cases, substantial legal fees and devaluation of an asset could affect the overall size of your estate as heirs go through the courts to gain allowances.

6. Improperly Funding Your Trust, or Not Reviewing Trust Assets Regularly.  A Trust is an excellent component to have in virtually any Estate Plan – but it could all be for naught if you don’t properly fund it. Creating a Trust is only half the battle; it’s useless until it’s actually funded. Funding is not a one-time task – after all, you will continue acquiring and disposing of assets through your life.

7. Forgetting about Taxes.  Estate tax liability can put a huge dent in what you plan on leaving your beneficiaries. In addition to your estate owing taxes before beneficiaries are paid out, you also want to think about how your gifts will impact individual heirs, too.

8. Not Securing Your Estate Plan – or Making It too Secure. Your estate planning documents are the end result of handling Your Legacy Goals. Make copies of your planning documents, and make sure your loved ones can find it. You would be surprised how many times we hear families say they are certain their deceased loved one has a will, but the only copy of the will is locked in a bank vault – which they cannot get to until a court grants them access. Keep your documents in a safe place, but make sure your loved ones can find them.

9. Not updating your Estate Plan – ever, or infrequently. “Life moves pretty fast.” Words of wisdom from Ferris Bueller’s Day Off. Your life today is not the same as it was last year, and is not the same as it will be next year. This means that meeting Your Legacy Goals is not a set-it-and-forget-it deal. Any major event could require a change in your planning documents – for example, marriage, divorce, birth of a child, expansion of your business. At regular intervals you need to take stock of your life, and consider whether changes need to be made to your planning documents.

10. 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.).

Written by: David Carter

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