Having a solid estate plan in place is important to ensuring that your wishes are carried out and your family is taken care of. Regardless of the size of your estate, attempting to create an estate plan on your own can lead to costly mistakes down the road. Being aware of these common estate planning mistakes, and seeking the counsel of an experienced estate planning attorney in Chester County, Pennsylvania, can help to ensure all of you are well prepared for whatever may come your way.
Only Having a Will
A last Will and testament is not a complete estate plan. It is critical to consult an estate planning lawyer to find out how to best protect your interests and your beneficiaries. The best estate attorneys will do a comprehensive review of your assets and finances, talk with you about planning for incapacity, ascertain your family circumstances, and advise you on whether trusts would provide any benefit to you or your loved ones.
Failing to Create Powers of Attorney for Finances and Health Care
Many people have the misconception that creating a general durable Power of Attorney [POA] will give your agent control over your health care decisions and financial matters. Being as specific as possible in a POA can help to ensure your rights are protected and your desires are carried-out as you intended if you become incapacitated.
A Durable Power of Attorney for Health Care, also referred-to as a Health Care Directive, allows your designated agent to make medical decisions on your behalf, and also enables you to specify your wishes for end-of-life decisions if you are unable to make them yourself. A Durable Power of Attorney for Finances gives your agent the ability to handle your finances in the event of incapacity. While most people choose the same person for both types of POA, some prefer to name separate trusted individuals to manage their health care decisions and finances. Attorneys who specialize in Wills are knowledgeable about how Powers of Attorney should be drafted.
Misunderstanding the Implications of How your Assets are Distributed
Even if you have a Will, some assets like life insurance and retirement accounts are not typically controlled by your Will and do not have to pass through probate. This can lead to problems if you fail to update beneficiaries after major life changes like divorce or the death of a spouse. In addition, understanding which assets may be subject to estate and income taxes can help your beneficiaries keep more of their inheritance in the long run.
Other actions that you may think are beneficial, such as adding your adult child to the title of your home or other property, attempting to plan your estate around specific assets, or failing to create trusts for minor children and loved ones who are not good at managing money can have disastrous unintended consequences. A probate lawyer can help you understand how certain estate planning documents like trusts can be effective ways to simplify things and reduce the amount of time and money your beneficiaries spend on settling your estate.
These are just a few common estate planning mistakes that can throw a wrench into even the best-laid plans. An experienced attorney can help you sort it all out and create a solid estate plan that gives you peace of mind.