Three Big Estate Planning Mistakes You Can Avoid

Most people discover estate planning mistakes when it’s too late after the fact in dealing with a loved one’s estate that was not properly planned or not planned at all. The good news is that by sitting down with a Pasadena estate planning lawyer now, you can greatly increase the chances that your individual wishes are followed and that your intended beneficiaries receive the assets you want.

Furthermore, there are benefits to estate planning even if you’re not thinking about what happens after you pass away. Appointing important people such as a power of attorney agent to make decisions and take actions on your behalf if you become unable to do so is critical in the event that you face an illness or sudden injury. One in four people will find themselves struggling with these impacts over the course of their life, and failing to plan for incapacity can prove especially problematic.

The first major mistake with estate planning is procrastinating. Many people assume that an estate plan does not apply to them due to lack of assets or because they believe that they have a relatively simple estate. There are still important steps you can take with a basic will, such as naming a personal representative to handle your estate after you pass away and naming a guardian for any minor children. 

The second big mistake in estate planning is not reviewing or updating your beneficiary designations outside of your will or trust or other estate planning tool. Beneficiary designations can apply in things such as your 401k account, IRA, or your life insurance policy. If much has changed in your life, you may have new beneficiaries, or if, for example you’ve gotten divorced, you may wish to remove existing beneficiaries. Having a conversation with an estate planning attorney can help you to identify the strategies you need to keep in mind and what you may need to update.

A final avoidable estate planning mistake is not choosing the right personal representative. A personal representative has a great deal of responsibility when it comes to managing the transfer of your assets. Once you pass away, the personal representative must come forward to submit your will to the California courts and that person will then be responsible for an array of tasks such as informing creditors about the status of your estate, identifying all assets and debts, communicating with beneficiaries, paying taxes, and ultimately transferring these assets to any beneficiaries after debts have been paid. Who you choose is essential.  

This person should ideally have strong organizational and good communication skills, but should also feel comfortable serving in this role. Simply appointing someone in your family without informing them can be a mistake as they may find it overwhelming and not want the fiduciary duty or responsibility of handling your estate. Make sure you spend some time thinking about who should serve as your personal representative and in working with your lawyer to determine these next steps. Our Pasadena estate planners can help you create a customer plan for your future.

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