Key Takeaways

• It’s crucial to avoid estate planning mistakes to ensure your wishes will be carried out in the future.
• Although a will is the foundation of every estate plan, it does not avoid probate, offer tax strategies, or plan for incapacity.
• It’s important to start estate planning early to avoid the risk of incapacity. All estate planning documents must be drafted while you are still of sound mind in order to be valid.

Estate planning can be an emotional and legally complex process. However, it’s one of the most important steps you can take to ensure your intentions will be carried out and your loved ones will be provided for when you pass. Being aware of the common estate planning mistakes to avoid can help ensure your legacy is protected and your final wishes will be fulfilled.

Here are several of the most common estate planning mistakes to avoid:

1. Failing to Create an Estate Plan

One of the most common estate planning mistakes people make is not having an estate plan at all. They might not know where to start or think they don’t have enough property. Importantly, anyone who wants to control the distribution of their assets when they pass should create an estate plan. If you fail to have at least a will in place when you pass, intestate law would govern who receives your property. This means the state’s laws would determine distribution, which can result in consequences you had not intended.

2. Relying Solely on a Will

Many people mistakenly believe a last will and testament is all they need in their estate plan. However, there are a variety of estate planning tools that can be used to ensure your wishes are met in the future. Although a will is the foundation of every estate plan, it does not avoid probate, offer strategies to minimize estate taxes, or plan for incapacity. Other vehicles to consider that can be used as part of a comprehensive estate plan can include trusts, beneficiary designations, and powers of attorney.

3. Never Updating Your Estate Plan

Once you have created your estate plan, it’s important not to put it in a drawer and forget about it. Your estate plan should be reviewed at regular intervals and updated when any major life changes occur. For example, the birth of a child, marriage, divorce, or any significant increase or decrease in wealth are all events that warrant revisiting your estate plan.

4. Failing to Plan for Incapacity

A thorough estate plan shouldn’t only address who receives your assets when you pass away. It should also include a plan for incapacity. If you suffer cognitive decline or become too ill to care for yourself, an incapacity plan can ensure you have named an individual who can act on your behalf. Specifically, a healthcare power of attorney, along with an advance healthcare directive, can ensure you’ve appointed an agent who will carry out your wishes for your medical treatment. A financial power of attorney can name a trusted individual to manage your financial and business affairs.

A healthcare power of attorney can help avoid the need for guardianship proceedings, in which the court would appoint a person to make healthcare decisions for you. Similarly, conservatorship proceedings can be avoided by having a valid financial power of attorney in place.

5. Trying to Create an Estate Plan on Your Own

One of the biggest estate planning mistakes is trying to create an estate plan DIY, or without the guidance of an attorney. Not only might you not understand what tools are available, and which are best to use for your specific needs, but you risk creating invalid documents. If the documents do not adhere to certain legal requirements, it would be as if you had no estate plan and intestate law would apply.

6. Not Using Beneficiary Designations

Not using beneficiary designations for retirement accounts and life insurance policies can result in these assets going through the probate process. It can also trigger tax consequences for the beneficiaries that could have been avoided. By designating beneficiaries, these assets can be passed directly to the beneficiary you intend to receive them while potentially minimizing the tax implications.

7. Failing to Plan for Long-Term Care Costs

Long-term care is incredibly costly. Failing to plan ahead can deplete your life savings and potentially destroy your loved ones’ inheritances. It’s crucial to work with an attorney who can help you develop a plan to ensure your medical needs will be met in the future. They can advise you regarding Medicaid planning and help you explore other options such as long-term care insurance.

8. Not Using Asset Protection Strategies

Estate planning isn’t only about who gets what from your estate. It is also about safeguarding your assets. An estate planning mistake to avoid is failing to have asset protection strategies in place. This can leave your assets exposed to creditors, Medicaid, and judgments. Trusts, LLCs, and careful asset titling are just some of the ways you can shield your legacy.

9. Waiting Too Long to Create an Estate Plan

One of the most common misconceptions about estate planning is that it’s only for the elderly. This is not true. The unexpected can happen at any time, and every individual should have a few basic documents in place when they turn 18. Notably, if you wait too long to create an estate plan, you also run the risk that you will become incapacitated, at which point it would be too late to make one. If your documents are not created when you are still of sound mind, they would be rendered invalid by a judge.

Contact an Experienced Oklahoma Estate Planning Attorney

Estate planning can be complex and it’s critical to avoid pitfalls that would result in your wishes being disregarded. At Titus Hillis Reynolds Love, we are committed to offering clients knowledgeable counsel for estate planning matters, and help ensure they have the peace of mind they need. Contact us today to schedule a consultation and learn how we can help.