Most Louisiana estate planners set up their estate plans not for themselves but for the family members they leave behind. However, one false move and your best-laid estate plans could lie in ruin -- resulting in huge costs, headaches and difficulties for your loved ones.
In order to prevent such errors from affecting your estate and loved ones, take care to avoid the most common estate planning pitfalls below.
Failing to complete your estate planning process: Many Louisiana residents will begin to plan their estates but never finish. For example, some estate planners will visit an attorney, but after the attorney tells them the information required to finalize their estate plans, they never get around to putting it together, resulting in financial loss, difficulty and stress for their family members after they're gone. Don't let this happen to you.
Forgetting to keep your estate plan up to date: One should never view wills, trusts and other estate planning components as static, unchanging documents. It's only natural for a will to change and grow with you as you and your family change over time. Heirs may pass away or new heirs might be born. Divorces and marriages happen as well. Your will needs to reflect these changes as they occur.
Forgetting about your beneficiary designations: Your 401(k), IRA, life insurance policies and other financial accounts may have beneficiary designations associated with them. Whatever is written there is more important than what you say in your will and they will actually supersede your will if the two conflict. As such, make sure your beneficiary designations are accurate and up to date.
Selecting the wrong executor: Even though Uncle Bob is your favorite person in the world, are you certain he's capable of managing the complexity of your estate as executor? It's important to choose an executor who is financially savvy and can navigate the various rules and regulations related to estate distribution laws. You'll also want someone who is responsible and trustworthy enough to appropriately protect and distribute your estate to your heirs.
What your estate plan should achieve for your loved ones
At the end of the day, your estate plan should achieve the following for your loved ones:
- Reduce the costs associated with wrapping up you restate
- Fairly distribute your estate assets to your loved ones according to your wishes
- Reduce estate-related tax burdens
- Protect the continuity of your family and their relationships with one another
Take care to plan your estate wisely, avoid the most common estate planning pitfalls, and you can rest assured that your estate plan will make life exponentially easier for your loved ones.