When you think about the future, it’s important to not just think about where you want to be or what you want to accomplish next year. It’s important to also think about what will happen to your family when you die. It’s not something any of us necessarily want to think about. Estate planning is a crucial part of your future. You may not think so, but it is. Estate planning mistakes can devastate those you leave behind. In this post you’ll learn about estate planning mistakes you should avoid.
Not Creating an Estate Plan
The most common estate planning mistake is not creating an estate plan. Many people simply don’t think that they have enough money (or property) to bother going through the process. This just isn’t true. Although California has a small estate affidavit that can be used if your estate totals $150,000 or less, that doesn’t mean you should skip making a will. Or getting life insurance. Or making sure certain accounts (such as your checking and savings accounts) will go to the right beneficiary when you die.
A will is the most basic estate planning tool available. If you die without one, the probate court will follow California intestate laws to determine how your assets (including money and property, but won’t necessarily include life insurance with a named beneficiary or payable on death accounts) will be distributed. If you’re in a long-term relationship that isn’t a legal marriage or a registered domestic partnership, dying without a will could have a seriously negative financial impact on your partner. Your money and assets could go to your legal next of kin.
Also, if you have minor children and you’re a single parent, dying without a will means the court will decide who will raise your children if the other biological parent isn’t involved or if they had their parental rights terminated.
Of course, there are numerous other issues that can affect your assets and your family if you don’t create an estate plan.
You Do (or Don’t) Want to Provide Specifically for Someone
We briefly touched on this in the last section, but it’s important to talk about it. Maybe you want to provide specifically for your long-term partner to whom you aren’t married to and there’s no registered domestic partnership. Maybe you have biological children and you want to leave everything to them and not to your current spouse or significant other. Maybe you have an adult child to whom you’ve provided money, property, and other assistance and you believe that should be enough. Whatever your circumstance, if you do (or don’t) want to provide specifically for someone, you need to make sure your Last Will and Testament reflects that.
You Don’t Update Your Estate Plan
One of the worst estate planning mistakes is that you don’t keep your plan updated. Marriage, divorce, birth, the death of someone you care about, more assets, selling of certain property, or even changing your mind about what you want to do with your assets all affect your estate. If you don’t keep your estate plan updated, the most recent copy of your Last Will and Testament will be used in court. Your wishes at the time of your death may not be honored. Make it a point to review your estate plan on a regular basis.
Relying on Free Online Forms
You can find anything on the internet, including estate planning forms that allege they are in compliance with California Probate Code. Relying only on free online forms is a big estate planning mistake. There’s no way to know (unless you’re a lawyer who knows California Probate Code and any recent changes) whether the forms really are legally binding.
So, should you buy an estate plan online? Surely since there’s a price tag the documents must be complaint, right? That depends on where it’s purchased from. Also, those websites (even the ones that hire lawyers to create state-specific forms) can’t give you legal advice. They can’t tell you which trust you should use. Using these sites is still a gamble.
Learn More about Estate Planning
If you’re looking to avoid as many estate planning mistakes as possible, you should schedule a consultation with an estate planning lawyer to talk about your assets as well as your wishes.