Avoid These 4 Estate Plan Mistakes During the Pandemic
By: Barry E. Haimo, Esq.
September 17, 2020
Many normal, everyday activities are much more difficult in the time of COVID-19. Estate planning is no different. And while there are a number of reasons why it is important to develop or update your estate plan right now, it is just as vital to make sure you don’t make a misstep in your eagerness to get something official down on paper.
A poorly executed estate plan can be detrimental to your own care should you become incapacitated, and to your loved ones, who might depend on your estate financially. In short, it’s not something you want to screw up.
What are some of the most common mistakes people are making in our current environment?
Not Hiring a Professional
One of the most common mistakes in estate planning is assuming that a basic will, potentially even one that’s drafted at home using online forms and guidelines, is all you need for an estate.
When it comes to estate planning, this single document is not enough. And if it’s poorly planned, it can result in unexpected tax penalties for your beneficiaries — not to mention open them up to lengthy and expensive litigation.
An estate planning attorney will know what documents are needed to ensure that your affairs are handled exactly as you plan, and prevent any unexpected difficulties for your beneficiaries.
Worried about social distancing? There are options available, including curbside estate planning. Talk to a professional you trust to learn how they can help.
Not Updating Your Estate Plan
Estate plans are developed to fit the circumstances of your family at the time of the writing. But over time, most people have a significant life event or two that could potentially alter the way you want your assets to be distributed or your affairs to be handled.
You will also need new documents for changes such as new life insurance policies or changes in the status of assets such as retirement accounts. If you currently have an estate plan, take some time to review it carefully, and consider whether you’ve had any life events that would affect your plan.
Not Planning for the Possible Death of a Beneficiary
A thorough estate plan will make provisions for the potential death of each beneficiary. If a beneficiary dies and the estate plan does not include a contingency for this event, that beneficiary’s portion of the estate will have to go through probate.
Especially in the time of the COVID-19 pandemic, when everyone’s future is more uncertain than it would otherwise be, it is important to plan for this contingency.
Selecting the Wrong People to Handle Your Affairs
Ideally, every estate plan should include someone to handle your medical care (should you become incapacitated) and your financial matters.
You will want to select a personal representative who you trust to act in your best interests in these capacities. This person can be a family member, a close friend, or even a hired professional.
Sometimes, your relationship with your personal representative might change, though. If you start to feel that another executor might better reflect your wishes and be more equipped to execute your affairs the way you want, switching is possible — but only if you officially do so.
Would you like to learn more about estate planning, including other common estate plan mistakes to avoid? Get in touch with Haimo Law.
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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