Estate planning is the process of preparing your affairs for death or incapacity. Estate planning matters. You need to put the proper legal structure in place to protect yourself, your loved ones, and your assets. Unfortunately, people tend to make the same estate planning mistakes over and over again.
At Arnold & Smith, PLLC, we want to make sure that you have the tools and knowledge that you need to avoid the most common estate planning errors. In this article, our Charlotte, NC estate planning lawyers highlight four of the most common estate planning mistakes and explain the steps you can take to avoid them.
Mistake #1: Not Having a Real Estate PlanThe most common estate planning error is also the single biggest mistake you can make: Not creating an estate plan. Every adult should have an estate plan. You are never too young to get started with the process. Yet, a Gallup survey found that approximately half of Americans do not even have a will—let alone other estate planning documents. If you do not have estate planning, you and your estate are at the whims of North Carolina law.
Solution: You should take the time to sit down with an experienced estate planning lawyer and get the basic documents in place. If you are just getting started with estate planning, the process does not have to be complicated. Even a relatively simple will and a few other legal documents can provide you and your family with a significant amount of clarity and protection.
Mistake #2: Failing to Plan for IncapacityWhen most people think about estate planning, they focus on the transfer of assets. While deciding who gets what is an important part of the estate planning process, it is not the only thing you need to worry. Failing to prepare for a medical emergency is a huge mistake. Your estate plan should protect you in the unfortunate event that you become incapacitated.
Solution: If you are unable to manage your own financial and legal affairs, you will want to make sure that you have granted a trusted loved one that legal authority that they need to act on your behalf. Under the North Carolina Uniform Power of Attorney Act, you can give a trusted party power of attorney that only takes effect if you become legally incapacitated.
Mistake #3: Assuming a Will is Always the Best Way to Transfer AssetsYou can use your will to transfer money or property to your heirs. In many circumstances, a will is an effective asset distribution tool. That being said, it is not always the most efficient or cost effective option. It is an estate planning mistake not to consider the other strategies that might work better for your and your family.
Solution: You should also consider other, more advanced estate planning strategies. An experienced North Carolina asset protection attorney can help you evaluate all of your available options, including setting up a trust.
Mistake #4: Not Updating an Estate Plan on a Regular BasisIs your estate plan outdated? If so, it may not provide the protection that you need. Indeed, an outdated estate plan can sometimes cause just as many problems as having no estate plan at all. Life brings almost constant changes. You need to make sure that your estate plan fully accounts for the current needs of you and your family.
Solution: Make sure that you review—and if necessary, revise—your estate plan after any major life events. Some examples of major life events include a marriage, a divorce, a birth of a child, retirement, and significant financial changes. It is also a best practice to review your estate plan every few years. Make sure it still carries out your objectives. Updating an estate plan does not have to be a complicated process. Once you have the right structure in place, a North Carolina estate planning attorney can help you make quick revisions as necessary.
Call Our Charlotte, NC Estate Planning Attorneys TodayAt Arnold & Smith, PLLC, our North Carolina estate planning lawyers possess the legal skills and expertise that you can rely on. We will help you put together an estate planning strategy that protects you, your family, and your assets. If you have questions about estate plans, we have answers. Contact our team today for a fully confidential review of your case. From our local law offices, we serve communities throughout the region, including in Mecklenburg, Catawba, Gaston, Iredell, Lincoln, and Union Counties.