Estimates indicate that more than 50% of the people in Minnesota and across the country don’t have even a will, and less than 10% of the population has a comprehensive estate plan in place. It can be difficult to confront the questions of death inherent in creating an estate plan, but it is a necessary part of life to do so. Being aware of some of the common mistakes people run into in estate planning can make the process easier.
One of the biggest mistakes people can make is not having a will, or having a will that heirs cannot locate. It is common for people to think they can wait for a better time to have a will drafted, but this is a mistake. The better tack is to get the will done as a young person and then make changes to it as life events occur.
Another mistake is failing to name the right beneficiaries for things like life insurance policies and retirement accounts. If the wrong beneficiary is named on a retirement account, for example, there may be tax consequences resulting in a lesser benefit to heirs. It is usually better to leave a child’s inheritance to a trust in the child’s name rather than to a guardian.
It may also be important to create a power of attorney to ensure that they can step in to help children who have reached the age of majority if they need it. An attorney who practices estate planning law might be able to help people create or update their estate plans by examining the facts of the situation and suggesting planning instruments to meet the client’s goals and needs. An attorney might help the client create a will, name beneficiaries or develop one or more trusts to ensure the efficient transfer of assets after death.
