While it's not something people like to think about, we all need to think about what happens when we die. Dying without a will or an estate plan will make things difficult for your families; especially if you have young children or family members with special needs.
Many people prepare a basic will during their lifetime and quickly forget about it, thinking that they have the issue under control and their interests are covered indefinitely. Most people don't know that expired wills can actually cause more problems than they solve. To guide you or give you some insight into the issue, here is a list of the 4 most common mistakes that estate lawyers deal with.
Mistake 1: not making a plan
There is an old saying that goes "if you don't plan, you plan to fail". Some people believe that if they don't need a plan because they don't have a lot of assets. The reasoning behind this is that their insurance will be sufficient to support the needs of their families once they have passed away and the heirs will only speak to themselves about the fair distribution of personal belongings.
The sad truth is that sometimes death can bring out the worst in people. It's not uncommon to hear about families arguing over who gets what. Additionally, life insurance may not adequately cover the needs of children or your spouse, and inheritance taxes may take longer than you realize. An estate attorney can minimize tax obligations and maximize the benefits for your beneficiaries.
When you can't manage your death, you leave your family's future at the mercy of strangers.
Mistake 2: your plan is out of date
As mentioned above, some people prepare their wills early and forget about it. This can cause problems. For example: if you prepared a will early a few years after the start of your marriage, it certainly wouldn't help if you now have children. Other important life changes can also void the validity of your will; things like higher income, divorce, number of children, etc.
An estate lawyer can keep your will up to date so that it always reflects your current life situation as well as the needs of your family.
Mistake 3: DIY wills
Wills do not follow one-size-fits-all solutions. The laws can be very different depending on the state you live in and these laws are often changed and updated. You don't want to manage your death, assets, and estate with one over-simplified solution. Everyone's circumstances are unique and the needs of your family and your current liabilities and assets should be considered for what they are.
Your estate attorney can assess your exact situation and come up with plans that will meet your and your family's needs in a much more detailed and organized manner.
Mistake 4: failing to verify beneficiary designations
If you have some kind of life insurance, pension, 401k, or other similar plans, have you checked to see the beneficiary of these financial programs? Several people have passed away and assumed it was enough to list the beneficiaries of their retirement accounts and investments in their wills. What these folks didn't know is that the beneficiary named in some financial accounts trumps the validity of wills, even those made recently.
If you set your former daughter-in-law as the beneficiary of your 401k, a New Will stating that it should go to your grandson will not void it.
Planning for the future and deciding where your assets are going should always be done well. This is something you don't want to do quickly and casually.