New York Estate Planning & Elder Law Blog
There are several reasons why people hesitate to or refuse to plan for death or incapacity. Failure to create an estate plan, however, can result in a person facing several complications which includes increased fines and placing additional stress on your loved one.
As a result, this article reviews some of the important pieces of estate planning errors you should make sure to avoid.
# 1 – Failure to Create an Estate Plan
One of the most common estate planning mistakes is failing to create any type of estate plan at all. To avoid this error, it is important to understand that estate planning plays a vital role in protecting individuals, their assets, and their loved ones. Otherwise, a person’s estate will be distributed following New York probate law. This holds regardless of a person’s wealth or age. Even people who understand this, however, fail to create an estate plan. Waiting to create an estate plan is almost always a mistake.
Instead, it is a better idea to write estate planning documents and to update them throughout your life as various changes occur. Not only should you create an estate plan, but you should also make sure that these documents are located in a place where they can easily be accessed by your loved ones in case something happens to you.
# 2 – Not Adequately Updating Beneficiary Designations
Beneficiary designations for some assets will take control over designations that are found in a will. As a result, it is vital to review assets like 401(k)s, IRAs, and life insurance following major life events. Otherwise, it is highly likely that your surviving loved ones will end up in a dispute regarding who owns what assets.
By failing to make proper beneficiary designations, there is also a probability that income tax on retirement accounts will need to be paid sooner which can lead to a larger than necessary income tax liability. Not only should a person make sure to name a beneficiary, but they should also make sure to be clear about the beneficiary that they are naming. By not being clear with these designations, there is a good chance that a person’s wishes will not be fully executed.
# 3 – Remembering Your Children
Some people make the mistake that they do not need to create power of attorney for children over the age of 18. If a child is over the age of 18 and becomes incapacitated, however, a medical professional will not speak to a parent if a power of attorney is not in a place.
In addition to fully addressing power of attorney issues with children over the age of 18, it is also critical to make sure that adequate plans are in place for children with special needs or children who might need certain types of financial assistance following your death.
Contact an Experienced Estate Planning Lawyer
The estate planning process is full of challenges, but a knowledgeable estate planning attorney can make this process much easier. Contact Ettinger Estate Planning today to schedule a free initial case evaluation.