#14 of 25 Common Estate Planning Mistakes – Life Events

Not Updating Your Estate Plan to
Reflect Life Events
Estate planning is impacted by life events (divorce, marriage, death of family member, birth of family member, substantial change in health, diagnosis of serious illness, change in financial circumstances) and needs to be revised accordingly. After a life event, you need to review your estate plan, including your trust agreement, to determine what needs to be amended to reflect the change. One of the benefits of a revocable trust is that it can be amended to reflect changed circumstances following a life event.

#13 of 25 Common Estate Planning Mistakes – Plan Reviews

Not Conducting Periodic Reviews of Your Estate Plan
Estate planning is not a static process. You cannot place your estate plan on a shelf and expect everything to work out. Estate plans require maintenance. Every 18- 24 months you need to review your estate plan’s legal documents and the beneficiary designations on your financial accounts to confirm that everything is in order and properly coordinated. A periodic review also offers an opportunity to determine if your needs, circumstances or laws have changed since last review.

#12 of 25 Common Estate Planning Mistakes – Designations

Failing to Update Beneficiary Designations
Retirement accounts, life insurance and annuities all
avoid probate with a designated beneficiary for each
account. These beneficiary designations will override any
contrary instructions in a will or trust. These accounts can
represent a substantial portion of an estate and need to
be coordinated with other aspects of your estate plan. A
common error is failing to update these beneficiaries in
response to life events, resulting in funds being distributed contrary to your intent. The beneficiary designations on all accounts need to be periodically reviewed, and updated as needed, to reflect changed circumstances and life events to remain coordinated with your estate plan.

#11 of 25 Common Estate Planning Mistakes – Digital Assets

Neglecting Your Digital Assets
Increasingly, people are living more and more of their
lives in the virtual / digital / online world. However, many
estate plans fail to include directions regarding these
digital assets. Many bank accounts, social media and
email accounts are assets with financial or sentimental
value which can only be accessed online. Your power of
attorney, successor trustee / personal representative will
need specific authority and information to access and
manage your digital assets. You need to indicate which
accounts should be closed, deleted and transferred. Your
successor trustee / personal representative will need a
comprehensive and updated listing of all digital accounts
with usernames, passwords and security questions to
access your online accounts. Without this information,
it will be impossible to administer your digital estate,
causing potential financial loss and emotional hardship.

#10 of 25 Common Estate Planning Mistakes

Not Discussing Your Estate Plan with Your Family
Many people make the critical error of not discussing their estate planning, and why certain choices were made, with their family prior to their passing. Communication is especially important when your plan includes unequal asset distributions among your children. A failure to communicate often causes hurt feelings and misunderstandings resulting in a considerable amount of unneeded (and costly) litigation. Many of these problems, and the associated expenses, can be avoid by discussing your estate plan, and its goals, with your family. You are the best, and in many ways, only person to explain your estate planning choices to your family.

#9 of 25 Common Estate Planning Mistakes – Discussion

Not Discussing Your Estate Plan with Successor Trustee / Personal Representative
You may wish to keep your estate plan confidential, but that is likely a mistake. A lack of communication is a frequent cause of estate plan failure. Living trusts and wills
are written in technical legal language. Your successor trustee / personal representative may not be able to determine your intent and their duties from reading the
documents alone. You can increase the odds of your estate being successfully administered by speaking with your designated successor and explaining what you want.

#8 of 25 Common Estate Planning Mistakes – Alternates

Failing to Name More Than One Successor Trustee / Personal Representative
Estate planning is about “what if?” Your plan should include designated backups / alternatives for all of the key players, including successor trustee / personal representative. Estate plans fail because people make presumptions about the order of death and availability of people to take on certain roles. By providing alternates, you give your plan additional strength and flexibility to continue to function if the unexpected happens. Image the picture above with roles switched, whose in the bed?

#7 of 25 Common Estate Planning Mistakes – Trustee/Representative

Naming the Wrong Successor Trustee / Personal Representative
Your properly drafted and fully funded living trust may not
achieve your goals if your successor trustee fails to follow
(or understand) its provisions. Many people name one or
more of their adult children as successor trustee without fully
considering whether he or she is best suited to administer their
trust following their incapacity and after their passing. While it
may seem appropriate to name your oldest child as successor
trustee, you need to carefully consider whether he or she has
the knowledge, time and experience to properly administer
your trust. If you expect a disagreement within your family
about the trust’s administration, you may wish to consider
naming a third-party or professional successor trustee.

Many of the same concerns apply to your Personal
Representative. In addition to understanding the terms of your
will, your personal representative will need to understand the
probate process. Your personal representative also needs to
have the time to meet with attorneys and prepare and submit
required court filings on time. A poorly chosen personal
representative will increase the stress of the probate process,
as well as the time and expense to complete the process.

#6 of 25 Common Estate Planning Mistakes – Attorney

Not Working with an Experienced Estate Planning Attorney
Many people attempt to save money on estate planning
by getting a do-it-yourself trust agreement online.
Or selecting the attorney who offers the lowest price,
regardless of experience. A better value is to work with an
experienced estate planning attorney who will craft your
estate plan to meet your needs and goals. If your estate
planning documents are not properly drafted, they will
not achieve your objectives. Additionally, an experienced
estate planning attorney will be able to counsel you about
how you can benefit by including a living trust in your
estate plan.

#5 of 25 Common Estate Planning Mistakes – Not Funding

Not Funding Your Living Trust
Living trusts must be funded to avoid probate and the
need for guardianship. “Funding” a living trust means
completing the process of retitling your assets from
your individual name to the name of your trust. Funding
includes both assets with titles (like real estate) and those
without titles (like household furniture). When the funding
process is not completed, one of the primary benefits
of a living trust, avoiding probate, will be lost since the
unfunded assets are subject to probate.