Estate planning mistakes and how to avoid them

Estate planning is like car insurance – you need to have it before you need to use it. –Michelle Ogborne

Karl and Julia thought about creating wills. However, they never considered their assets worthy of estate planning. They were so busy living life that they didn’t have time to think about dying. When a driver crossed the highway and hit their car head-on, they were killed. What followed was a nightmare for their family.

Karl’s parents wanted custody of the kids. They lived a few states away and only saw the kids once a year when they visited. Julia’s sister had a stable, successful career. The kids loved having sleepovers at her house. She was sure her sister and brother-in-law would have wanted her to become the legal guardian.

Karl’s parents were willing to put up a fight. The last thing anyone needed after the devastating loss of their loved ones was an extended custody battle.

#1 Estate Planning Mistake

The biggest estate planning mistake you can make is not to create one. In Arizona, when someone dies without a will, the state decides who will inherit the assets. This is called “dying intestate.”

If you die intestate, your family will need a court order to access your bank accounts. Without one, they may struggle to pay your bills, including your funeral expenses.

Karl and Julia left behind a family with multiple people ready and willing to take care of their children. When parents don’t leave a document detailing guardianship, the court will be left to make the decision based on the best interest of the child. Family members are the first preference, and they have the opportunity to petition the court. However, the court doesn’t know who your children are familiar with or who would raise them with your values in mind.

Without estate planning, it may take months or even years to settle your estate. The court will name an executor. It may not be the person you would have picked. If family members contest their distribution amounts, it can add even more time and cost.

Avoid Estate Planning Mistakes

Here are a few tips to get your estate in order:

• Update your will. At family gatherings, the “kids,” now in their 40’s, often joked with their parents: “Does Uncle Bobby still have custody of us if something happens to you?” Part of the estate planning process includes updating your will as your circumstances change.
• Include a medical power of attorney. Your estate plan outlines your wishes when you die. What if you suffer a long-term disability? In addition to a living will, you need to name people who will be decision-makers, if you’re incapacitated.
• Review life insurance policies. Life insurance policies may be subject to a hefty estate tax. Not changing your life insurance beneficiaries to a trust may be another estate planning mistake.
• Work with an experienced professional. You need an Arizona legal professional who understands family law and estate planning. An experienced Arizona attorney will have strategies that are customized for your personal and financial situation.

Ogborne Law Estate Planning

Karl and Julia had a wealth of family members willing to care for their children. It could have been worse. If you have no family members or friends willing to serve as guardians, your children could end up as wards of the state.

Put your estate planning plan in place and discuss the future, including when it may need updates. It can be the beginning of a legal relationship that ensures you’ve done the planning for your loved ones. Contact Ogborne Law to learn more.