Estate planning is a critical task for all adults. It serves as a way to convey your wishes so that your loved ones know what to do if you become incapacitated or when you die.
There are a few estate planning mistakes you should avoid making. Taking each of these into account can help to ensure that you have a comprehensive estate plan safeguarding your interests down the line.
Failing to write a will
Dying without a valid will is known as dying intestate. If this happens, your assets are all handed down according to Minnesota’s intestacy laws. This means that you won’t have a say in who gets what assets. Your will conveys your wishes and reduces the likelihood of disputes among your family members.
Failing to establish powers of attorney
Powers of attorney (POA) designations allow you to name someone to make decisions on your behalf. If you don’t establish the POA, the court will have to step on your behalf and determine who can manage your affairs. This could lead to decisions being made on your behalf that aren’t in line with your wishes. There are two main types of POA. The financial power of attorney grants someone authority over your financial affairs. A healthcare power of attorney allows someone to make medical decisions for you.
Failing to update your estate plan
Creating an estate plan isn’t a one-and-done event. Instead, you’ll have to review and update the plan periodically. This should happen every few years or if you experience a major change in your life. Some examples of changes that warrant reviewing the estate plan include:
- Marriage or divorce
- Birth of a child
- Death of a beneficiary
- Changes in the law
Failing to review and adjust your estate plan periodically can lead to your assets being handed down in ways that you no longer intend. Whether you’re creating your initial estate plan, reviewing an already set plan or making changes, working with a legal representative who can assist with the process is beneficial to ensure that your current plan conveys your wishes clearly and in enforceable ways.