Maybe you are one of the few who has already begun planning your estate. If so, great job. Many Americans continue to avoid this task, believing the process to be overwhelming. As the estate planning process involves many documents and decisions, for a variety of purposes, it is easy for one to put off estate planning, to the detriment of one’s family.
Once the process has begun, the following are some common pitfalls to be avoided when formulating a Will or estate plan:
Failure to appoint a guardian for minor children. Failure to appoint a guardian is a big point that most wish to avoid considering, as few desire pondering their own mortality. However, it’s important to appoint a relative or close family friend to serve as the guardian of minor children in the Will, in the unlikely event that both spouses die while the child is a minor. Often times, this is the main issue that prevents people from finalizing their will. If this decision is being delayed, please keep in mind that, if both spouses die, and no provision exists to appoint a guardian for minor children, the court will step in and decide who the guardians of the minor children will be.
Failure to set or update beneficiaries for financial accounts. Any retirement or financial account should have a designated beneficiary. Once the account holder passes away, the beneficiary will automatically become the owner of that account, despite what any language in the Will may indicate; i.e. accounts with beneficiaries pass “outside of the Will.” Therefore, it is extremely important that beneficiaries be named for all accounts, in order to avoid a potentially arduous and costly probate process.
Failure to update one’s Will. A Will should not be thought of as a “one-and-done” document, but rather should be thought of as a more fluid document that changes as circumstances change. A good rule of thumb is to review the Will once a year, while considering physical and financial health, and the relationships in your life. Making one’s wishes known and documented will further ensure that desires are met, and save loved ones time and energy.
The appointment of an unqualified executor. Performing the functions of an executor may be a large task. Ideally, the appointed individual will be organized, informed and conscientious, as the job of serving as executor will be time consuming. Much work will likely exist, even in the simplest of estates. Appointing the right person will help ensure the timely, accurate distribution of your assets and possessions, with only a minimum amount of family friction. If no one appears qualified for the position, one has the option of appointing a third party professional to serve as executor, such as a bank, trust company or like professional, with experience dealing with estates. However, this option may result in additional costs and fees.
This list is by no means meant to serve as a comprehensive guide to estate planning. If you or someone you know needs assistance with estate planning or estate administration, please call Scott Bonebrake at 610-892-7700, or email Scott at Sbonebrake@Noelandbonebrake.com.