Estate Planning can be a difficult topic to prepare for - but nonetheless, it's essential to have.
Estate Planning is about more than just managing your assets and wealth. It's also about making sure that your wishes are carried out, even when you're not around to communicate them.
When you take part in estate planning, you're planning for when you become incapacitated or dead. It’s even less fun to talk about unorganized estate planning, which oftentimes leaves your loved ones heartbroken or left with strained relationships.
Here is a look at six common issues that can cause inheritance disputes, and how you can avoid them.
Leaving Behind Surprises
We all want to keep our loved ones out of the dark, but there are some things that are just easier to talk about first with a financial planner. Estate planning is one of those things.
The biggest problem when it comes to estate planning is the tendency to keep things secret. That’s why conversations should start with a trusted advisor. Most clients are actually more comfortable talking to their advisors about difficult topics like debt, divorce, and you guessed it - death and incapacitation.
But it's always in best practice to go home and talk to your loved ones about your plans as well. Talking about what’s going to happen when you die is a difficult subject, and we understand the impulse to push the conversation off. Planning ahead of time and talking as openly as possible now will alleviate heartache when the time comes.
Naming the Wrong Executor
When you decide to pass on and leave your estate to whomever you choose, it’s important to consider who will act as an executor on your behalf. The role of an executor can be with a person for years, and can include going to court, traveling, and working through reams of paperwork.
Executors take on a big role and it’s important to assign the role to someone who can handle it maturely. Too many times, estate issues will arise because the person in the role of executor was just not able to handle the responsibility.
The best way to handle this issue is by creating a short list of individuals you think are up for the job, and then think about their strengths and weaknesses. Are they responsible? Organized? Ethical? Do they have the flexibility in their schedule to handle the tasks they will need to accept as executor of your estate? Will they have the financial ability to ensure that your assets don’t lose value? Whoever you choose it is best practice to discuss with other family members on who you ultimately choose for the task.
Not Planning for Incapacitation
The last thing you want to think about when planning your estate is what happens when it's your time to go. But it’s actually one of the most important things to prepare for, especially as we age.
While it is easy to forget that estate planning does more than help our loved ones after we're gone; it can also provide them with critical guidance about our wishes while we're still alive, but incapable of carrying those wishes out on our own.
You can have a POA (power of attorney) in place to make sure that you have someone to handle your affairs while you are still alive. This person can be someone close to you who has your best interests at heart, or it can be an attorney who specializes in these types of matters. Having a POA in place will help avoid any potential financial disasters that could come up during a time like this.
Not Having Correct Names Listed on Estate Documents
It's easy to get confused about where you should list your beneficiaries. If you've listed a beneficiary on your will, but that same person isn't listed on the account level, it can cause delays and even cause your estate to become the subject of contentious disputes.
This is a very simple and common issue that can cause problems further down the road. If there are any contradictions it can lead your estate to become open to contentious disputes. Make sure to check, double check, and triple check where you list your beneficiaries before filing.
Not Claiming/Allocating Personal Assets
Preparing for incapacity and death is an important process. While many people take the time and care to clearly indicate to whom their financially valuable assets will go after their death, they often neglect to make plans regarding sentimental items. This can cause awkwardness later on as family members may feel confused about what they can take.
One of the best ways to avoid this issue is by gathering your family members and discussing who takes what. There are many ways you can go about this, but one of the most popular ways is by having some sort of color coding method and having everyone take turns on claiming the items that they would like to inherit one day
Once this task is completed, have a document or spreadsheet in place that lists the items and their claimants and include it in your will.
Estate Planning Solo
When it comes to estate planning, having a financial fiduciary advisor you trust is key to ensuring all of your belongings will be left to your beneficiaries.
The process of estate planning can be difficult and intimidating. It's important to have someone who has experience, who you trust, and who can guide you through the process so that you're leaving everything to the right people in the right amounts.
Estate Planning with Agemy Financial
At Agemy Financial Strategies, we understand that you want to make sure your estate is handled properly and distributed according to your wishes.
We can help you craft an effective estate management strategy that will enable you to manage your affairs during your lifetime and control the distribution of your wealth after death. An effective estate strategy can spell out your healthcare wishes and ensure that they're carried out – even if you are unable to communicate. It can even designate someone to manage your financial affairs should you be unable to do so.