Failing to leave a will is one of the 4 biggest estate planning mistakes anyone, including celebrities, can make. Effective estate planning provides protection for surviving family members and ensures that the wishes of the party penning the estate plan are fulfilled. There are several estate planning pitfalls to avoid, including failing to leave a will, failing to set up a trust, failing to update an estate plan once it is put in place and failing to account for the possibility of disability.
Because wills are useful in a number of ways, it is astonishing that two-thirds of adults do not have one. A will is the most basic aspect of any effective estate plan. Celebrities and other individuals alike may not have their wishes honored if they fail to properly execute a will and, instead, state laws will control how their assets are distributed if they do not have a valid will.
The next step following a will is to set up a living trust. Failure to do so can result in the public, and costly, probate process of the will. Unlike a will, which is public, a living trust can privately spell out who will receive what assets and how those assets will be received. As added benefits, a living trust avoids probate and provides federal tax benefits as well.
Once a will and trust have been set up, it is important to remember to update them, especially following a major life event such as a change in marital status or when the family grows. It is a good idea to regularly review any estate plan to ensure it reflects the estate planner’s most current wishes. Changes to a business may also warrant changes to an estate plan so it is important to keep up-to-date and ensure the estate plan is how the planner wants it.
There are also aspects of a thorough estate plan that can account for circumstances if the planner becomes disabled. Executing a power of attorney, advance directive and living will can account for this and are important to any effective estate plan. These documents allow the party or parties the planner designates to handle their medical and financial affairs if they are unable to do so and can help ensure that those decisions are made according to how the planner would want them to be made.
Estate planning can seem complex at times but should not be avoided. An experienced Maryland estate planning attorney can help with any estate planning need. The Maryland estate planning attorneys at Altman & Associates provide compassionate, knowledgeable and strategic estate planning guidance. They can be reached at their Rockville office at (301) 468-3220 or online for an initial consultation.