The majority of Americans are vastly unprepared when it comes to their estate plan and sadly, many more think that an estate plan is only for wealthy people. In fact, over half of Americans do not even have an estate plan in place, whether that is a simple will, a trust, or more, according to Forbes. Common reasons that many Americans avoid estate planning include::
- They believe that working with an estate planner is too expensive;
- They do not believe they have beneficiaries;
- They believe that estate planning takes up a lot of time and money
- They think that their family members will behave amicably and will sort out the estate by themselves without legal guidance; and
- They believe that they do not have enough assets to make estate planning worthwhile.
If your will or estate plan is incomplete or out of date, this article will help you avoid common estate planning mistakes. No matter the hesitation, estate planning is an important process and even many individuals, who already have a will, could benefit from a simple review or evaluation to ensure their current needs are covered properly.
The Most Common Estate Planning Mistakes
According to AARP, many people make the biggest mistake by not, first, sitting down to make a will or estate plan. Celebrities such as Prince and Whitney Houston did not update their wills, despite having a significant fortune. Some of the most common mistakes that everyone, regardless of their age, income bracket, or line of work, should avoid when it comes to estate planning are outlined below.
- Not Updating Your Will—A will should be updated every three to five years, or whenever there is a major life-changing event, such as the birth of a child or grandchild, divorce or death in the family, for example. As we age, our wishes change, as do relationships, careers, finances, and marriages, and these changes should be taken into consideration, on a regular basis.
- Failing to Take Minors or Young Adult Children Into Account—Will your 18-year-old child know what to do with a lump sum $100,000 inheritance? If, after you pass, your 12-year-old child’s other parent passes away, do you have a plan for guardianship? If your child is enrolled in college, will the funds you leave be enough to cover the rest of their tuition and living expenses? Parents and grandparents with minor or young adult children have all the more reason to update their wills regularly and work with experienced estate planners to ensure that they do not omit important aspects of their wishes.
- Not Funding a Living Trust—Having a living trust is a great way to ensure that the assets you leave to your loved ones avoid the probate process, avoid possible excessive taxation and are used for your intended purposes, but the living trust MUST be properly funded or it will not act as intended and will not avoid probate.
For More Information, Check Out Our Free Estate Planning Guide and Contact one of our Maryland Estate Planning Attorneys.
To start working with a Maryland estate planning attorney today, contact Frame & Frame at 410-255-0373 to schedule a consultation. Additionally, our free estate planning guide is filled with information that can help you decide what aspects of an estate plan are important to you.