Mistakes Seniors Should Avoid When Estate Planning
According to Legal Zoom, only 33% of adults in the US have made estate planning documents. Of those, some will have made sizable mistakes that will affect how their estate will be distributed.
Estate planning can be quite complicated, but it's worth taking the time to make sure you get things right. This is especially important for seniors as they move towards later life decisions.
For example, someone may be looking into assisted living in Huntington, IN. Having their estate planning taken care of before doing this can be very beneficial, but they can still do it later on if necessary.
In this guide, we'll take a look at some common estate planning mistakes that seniors should avoid. Keep reading for more.
Not Having a Will or Trust
The first mistake many seniors make (which we mentioned at the start of this article) is that many people haven't actually created the necessary documents. It's easy to delay making a will or a trust, but some people put it off for too long. In some cases, people think they don't need one at all.
It's important to understand that you need to have these documents in place; otherwise, the way in which your assets end up being distributed may not align with your wishes.
One of the benefits of estate planning early is that you can ensure things are set up how you want them to be. Creating a will or a trust will help ensure your assets go to who you want them to.
Failing to Update Your Estate Plan
It's a good idea to address your estate planning early, and using an estate planning checklist is a good way to ensure you cover everything. However, things can change with time. If this happens, you want to make sure you update your estate plan.
Significant events within your family may affect how you want your assets to be distributed. Consider events such as:
- Marriages
- Divorces
- The birth of grandchildren
If you haven't updated your estate plan, it can cause confusion and disputes when it comes to the distribution of your assets.
Overlooking Tax Implications
It's crucial to understand the legal aspects of estate planning. There may be tax implications that you need to take into account, and many seniors forget to do this. Without factoring these in, your beneficiaries may be hit with unnecessary tax burdens.
Estate planning for seniors often contains other complicated aspects like this. It's best to work with a professional financial advisor or an estate planning attorney. They'll be able to help you understand these tax implications and can guide you through the entire process.
Not Planning for Incapacity
Something that very few people do is plan for incapacity. We never know what life will bring, and there's always a possibility of someone becoming incapacitated and unable to make decisions for themselves.
Your family might have a hard time making decisions on your behalf if you don't have the right legal documents in place. These could include a power of attorney or a healthcare directive. You should establish a power of attorney and living will to ensure someone can make decisions on your behalf if necessary.
Not Communicating Your Wishes
When looking at estate planning basics, one of the first elements is communicating your wishes. Some people fail to talk to their families about what they want to happen to their estate, and this can lead to confusion and disagreements.
Even with a will and testament in place, you should discuss your wishes with your family. This will help ensure there are no misunderstandings when your assets are distributed.
Making Plans That Don't Comply With Current Laws
It's crucial to ensure your estate plans comply with current laws. If you work with a reliable estate planning attorney, this shouldn't be too much of an issue. However, even with that approach, there can sometimes be problems.
Laws change with time. If you work alongside an attorney to create your estate plan, but then don't update it for a long time, it may no longer be compliant.
After some time, it can be a good idea to discuss it again with an attorney to ensure there haven't been any changes that will have an impact. If there are, you can then make adjustments to make sure it's once again compliant.
Beneficiary Conflicts and Mistakes
Sometimes, people don't focus too much on their beneficiaries, and this can lead to mistakes. It's important to make sure there are no conflicts or contradictions as these can cause disputes during your estate distribution.
For example, in the event of a divorce, be sure to update beneficiaries on 401(k) plans and insurance policies.
You should also be sure to name contingent (or backup) beneficiaries. There's always a possibility that a beneficiary may die before assets are distributed. Without contingent beneficiaries specified, your assets could then end up in probate.
Not Making Special Provisions for a Challenging Child
Every family's situation is different, and it's not uncommon for one child to think they deserve more than another. They may have provided more care in later life, or have more children, for example.
Disputes during estate distribution can cause severe friction which you likely want to avoid. As such, you need to make your wishes very clear.
In some cases, setting up a living trust can be a good idea. For example, if one child struggles with substance abuse, you can specify that they won't receive their distribution until they get sober or meet other specific conditions.
Reliable Estate Planning for Seniors
Estate planning can get very complicated, so it's best to work with an experienced estate planning attorney.
It's best to do this early, so if you've found yourself living in an assisted living community in Huntington, IN, then it may be time to see to this. If not, this is another consideration that seniors should make.
Tipton Place Assisted Living is a leading senior living community in Huntington, IN. We offer assisted living in Huntington, IN, giving our residents access to a range of amenities and providing tailored care to meet the different needs of our guests. Contact us today to schedule a tour.