Estate planning is a process; one that can be fraught with costly and inefficient mistakes. These are some of the most common and expensive estate planning mistakes that Wisconsin residents make as they plan (or don’t plan) for the unexpected.
Avoiding estate planning all together
Not wanting to think about death may be human nature, but that avoidance can also be a major mistake. Estate planning makes a very difficult time easier for friends and family. The planning process also allows a person to take steps to ensure that family is provided for after death; in Wisconsin, if an estate plan is not present, Wisconsin’s intestacy succession laws go into effect. All organization of assets are done according to the law, without regard for the deceased’s wishes. Estate planning can also become a vehicle for organizing assets in preparation for the next phase of life (i.e. establishing a living trust, etc.) and for an expedient process after death.
Assuming a will is the only estate planning document
A comprehensive estate plan is a collection of documents appropriate for the client’s situation (contact an attorney to get recommendations and advice on the right estate planning documents). Since every situation is different, the right estate planning documents are custom and drafted to the benefit of the client. A complete estate plan can expedite the probate process, organize assets and liabilities, and provide clear guidance during very difficult times (i.e. when a loved one is very ill or has passed away).
Not drafting advance directives
When an incident happens that incapacitates a person—an accident, illness, mental affliction, etc.—-the person’s family is not automatically authorized to make legal decisions in Wisconsin. For that reason, advanced directives, also termed the Power of Attorney forms, are an essential part of an estate plan. Advance directives give legal authorization and instructions for vital financial and health care decisions that need to be made when a party is not able to.
Not Updating Beneficiaries
Naming beneficiaries is an important function of estate planning, but one that often is neglected or incomplete. Many people do not give this important estate planning task the attention it deserves. The beneficiaries listed in all estate planning documents should match the designation on all assets, such as life insurance policies. Designations should also be updated as circumstances change. For example, if a couple divorces, all estate planning forms (and asset documents) should be updated to reflect the change in relationship. Beneficiaries should also be named in case the primary beneficiaries are not available.
Not considering document storage
A well-prepared estate plan is useless if it’s not accessible during difficult times. In the past it was common to store legal documents in a lock box; today that strategy can make a very difficult time more challenging. If the lock box is in the deceased’s name (even if the executor is given access), the family needs to go through a legal process to get to the documents. Make the process easier for friends and family by considering accessible options for storage, such as a lawyer’s office or fire-proof safe. It can also be helpful to give copies of the will to significant parties, such as the executor and guardian named in the will.
Forgetting to update estate planning documents
All documents and insurance policies should be reviewed and updated periodically as circumstances change. Specifically, contact an experienced estate planning attorney to update documents when additional children are born, when additional beneficiaries need to be added, the executor name needs to be changed, family relationships have been changed, or there is a significant increase or decrease in assets.