“Yesterday is gone. Tomorrow has not yet come. We have only today. Let us begin.” – St. Teresa of Calcutta.
We all spend significant time planning various parts of our lives. But many of us neglect the important task of estate planning. Failure to plan, or creating a flawed plan, can create significant challenges, including costly probate proceedings, reduced inheritances, and prolonged family disputes. Beyond the financial burden, these errors can delay asset transfers for months or years. By avoiding common mistakes, you can safeguard your assets and ensure peace of mind for you and your loved ones.
Failing to Create an Estate Plan
Many assume that their assets will automatically pass to their family under state laws. However, this system often leads to expensive court proceedings and outcomes that do not align with personal wishes. Work with an estate planning attorney to create a comprehensive plan, including a living trust, will, power of attorney, and health care directive.
Not Updating Your Estate Plan
Life events can alter your estate planning goals. An outdated plan might have unintended consequences. Review your estate plan every three to five years to address changes.
Appointing an Unsuitable Trustee
The individual managing your estate should be organized, impartial, and financially savvy. Selecting someone who lacks these qualities can lead to missed deadlines, legal disputes, and family discord. Discuss the responsibilities of the role openly and designate a backup.
Overlooking Beneficiary Designations
Retirement accounts, life insurance policies, and certain financial accounts are distributed by beneficiary designations. Outdated forms can result in assets being transferred to unintended recipients or cause them to end up in probate. Regularly review and update these designations.
Failing to Fund Your Trust
Creating a living trust without transferring assets into it is akin to buying a safe but leaving your valuables outside. Collaborate with your attorney and financial advisors to ensure your wishes are honored.
Not Planning for Incapacity
Estate planning is not only about death. Illness or injury can render you unable to manage your finances or make healthcare decisions. Without appropriate documents, you and your loved ones may face a costly and time-consuming conservatorship process. Appoint trusted agents while you are healthy.
DIY Estate Planning
While online templates may seem cost-effective, they often fail to account for California-specific laws, proper signing formalities, and critical funding steps. Correcting these errors after death is nearly impossible and typically far more expensive than professional guidance. Hire an experienced attorney who can ensure your documents align with your goals and comply with state law.
Estate planning errors can have far-reaching consequences, both financially and emotionally. By addressing these common mistakes and seeking professional assistance, you can protect your assets and provide your family with the security and clarity they deserve, ensuring a smoother tomorrow for your loved ones.
949.285.4270 / SusanHattanLaw.com / Susan@SusanHattanLaw.com
903 Calle Amanecer, Suite 230, San Clemente, CA 92673
