Many people avoid estate planning so they don’t have to think about the issue of their own deaths. However, much like taxes, death is inevitable. By understanding our own mortality – and taking steps now to plan ahead – we can protect both our loved ones and our assets after we are gone.
Generally, something is better than nothing
The single worst estate planning mistake anyone can make is not having a plan at all. Without one, you are leaving your hard-earned property and the financial future of your loved ones at the whim of California state intestacy laws. You are also likely opening up your heirs to the possibility of exorbitant estate taxes levied by the federal Internal Revenue Service (IRS).
The importance of naming trusted people to fulfill your wishes
Another common estate planning mistake is to not decide upon executors, guardians, powers of attorney and health care proxies in advance.
By not having a health care directive, for example, you may find yourself subjected to unwanted life-sustaining care in the event you become incapacitated. Alternately, you could be placing your loved ones in the unenviable position of having to make decisions on your behalf without understanding your wishes. This can lead to serious disagreements, particularly if there are conflicting moral or religious beliefs amongst your loved ones that could influence the medical care you receive. Those disagreements have the potential to linger following your death as well.
Without a power of attorney, your loved ones might be unable to make important financial decisions on your behalf such as:
- Making your mortgage payments
- Handling issues regarding your Social Security benefits
- Transferring assets to a trust to pay for your expenses
- Covering the costs of essentials like utilities, groceries and health insurance
- Placing you in and arranging to pay for much-needed care like that provided by a hospital, nursing home or rehabilitation facility
Remembering to account for life changes
Another key estate planning error is failing to update documents after major life events like the birth or adoption of a new child, divorce, death of an heir or an inheritance. For example, should you go through a bitter divorce, you might no longer want the bulk of your assets to go to your former spouse. You also likely don’t want him or her to have control over decisions relating to your medical care, so you will need to update your estate plan accordingly. You might also want to ensure that certain assets stay in the family, so those particular items would need to be addressed as well.
The issue of estate planning is much too complex – and too important – to be addressed by a “one size fits all” document. That is why boilerplate, “do-it-yourself,” legal forms fall short for most people. To have an estate plan drafted that takes into account your unique financial situation and best meets your particular needs, speak with an estate planning attorney at the Woodland Hills-based Law Offices of Yacoba Ann Feldman today. Contact The Law Offices of Yacoba Ann Feldman.