Many people believe that their estate plan is good enough, because their estates are fairly modest and they are leaving everything to just a few beneficiaries. But a well-intentioned estate plan can contain serious errors, especially if the testator put it together without the help of an attorney.
If certain contingencies are not planned for, your estate could end up going to people you never intended to, or be severely depleted. Here are four common estate planning errors to avoid, as provided by the Bradenton Herald:
1. Not having contingent beneficiaries on your retirement account. If the person you designated as the beneficiary pre-deceases you, the account may be distributed “per stirpes” or “pro rata.” Under per stirpes, the inheritance goes to the beneficiary’s surviving family members equally. Under pro rata, the account is divided between surviving named beneficiaries only. Make sure your account will be distributed the way you want.
2. Forgetting to make bequests of unique personal property, such as artwork or a coin collection. One good way to do this is to make a “separate writing” that the will refers to, but is a separate document. It is easy to update, requiring only a signature and date.
3. Lacking a plan in case you are ever incapacitated. Without a trust, power of attorney or health care directive, your wishes for how to handle your medical decisions and finances if you can’t speak for yourself may go unfulfilled.
4. Picking the wrong person as personal representative or power of attorney. Someone without the experience and responsibility to do the job right can cause serious headaches after you pass away.