1. Not creating an
estate plan. If you die without a Will, the probate court will determine the
disposition of your property using the laws of intestate succession. Your
assets may be distributed to people you hadn't planned to receive them.
2. Not updating your estate plan when life events occur. Changes in marital status, having new children or grandchildren, moving out of state, deaths in the family, and changes in wealth are all reasons to review your Will.
3. Not considering family dynamics. Are you treating your beneficiaries equally instead of fairly? Simply giving each child an equal share may overlook the differing financial needs of each. Also, some children may have been closer and more attentive to you during your lifetime, while others may be estranged. Therefore, it may be more fair to reward some children with larger shares. However, if you decide to give in unequal shares, it's usually a good idea to discuss this with your children to avoid hurt feelings (and litigation) later.
4. Failure to update asset ownership. Your Will should be updated to reflect major changes in your estate assets. It is also a good idea to consult a qualified tax advisor to investigate the tax issues involved.
5. Failure to fund your estate to cover taxes and debts. Before your beneficiaries can receive any assets from your estate, all valid debts must be paid. Will there be sufficient assets to pay estate debts? After those are paid, will there be enough remaining to leave something to your children?
6. Neglecting your digital property. Social media, email accounts, cloud-based storage, and online banking are assets with financial or sentimental value. Unfortunately, many estate plans fail to provide guidance for your fiduciaries to access them. Which digital assets do you want preserved and which do you want deleted? You can grant permission for your fiduciaries to access digital assets in your power of attorney and your Will.
7. Outdated beneficiary
designations. Do the designations in your current Will still reflect your true
intent? Do you have new children or grandchildren, or perhaps new step-family? Have any of your descendants
passed away? Are there charitable gifts provided in your Will, and do you still
wish to give? While you're at it, have you reviewed the named beneficiaries in your payable-on-death accounts, such as pensions and life insurance policies?
8. Outdated fiduciary
designations. Have you nominated successor/alternate personal representatives in your Will? If
there is only one, what if that person is not available or willing to serve
when the time comes? If your Will does not nominate a successor, the court will choose a replacement. It's wise to name two or three successors, just to be safe. The same with conservators and UTMA custodians--it's a good idea to nominate successors for those as well.
9. Failure to plan for
incapacity. What will happen to you and your assets if you become
incapacitated? Who will take care of your medical and personal needs? Who will
manage your financial affairs? Having a durable power of attorney and advance health care directive should be a part of your estate planning. Not having those means a court may be required to appoint a guardian and conservator to act on your behalf.
10. Not working with a qualified estate planning attorney. Saving a little money with do-it-yourself or online Wills can lead to major problems later. These forms often overlook specifics of state law, and it's easy for a person to improperly prepare the forms. The completed document might even be invalidated by the probate court if it contains errors, wasn't executed properly or otherwise doesn't comply with Minnesota law.