A family can protect its wealth and plan for the future by creating a comprehensive estate plan. However, the complexities of estate planning can lead families to make critical mistakes, especially when creating an estate plan without experienced legal counsel. Some of the most frequent mistakes that individuals and families in Forney, TX, make during estate planning include:
#1: Not Creating an Estate Plan
The biggest mistake that a family can make is not having an estate plan. Although the structure and complexity of an estate plan can vary based on a family’s needs and assets, families can best protect their interests and wealth by having at least some of the most basic estate planning tools, such as wills and healthcare directives. Without an estate plan, families must pass their wealth from one generation to the next through Texas’s intestacy laws, which may not distribute assets as a family might wish.
#2: Not Updating Estate Planning Documents
Just because a family has created an estate plan does not mean that the estate planning process has ended. Instead, families should review and update their estate planning documents over the years to reflect changes in family circumstances and wealth. Certain life events should encourage family members to review their estate plan, such as:
- Marriages
- Divorces
- Death
- Birth or adoption of children
- Acquiring significant assets, such as real estate
- Moving to or from Texas
- Starting or selling a business
Not updating estate planning documents risks letting documents fall out of date and cease to reflect the family’s current circumstances and wishes.
#3: Overlooking Texas-Specific Requirements
Texas law has specific requirements for creating estate planning documents, such as wills, trusts, and powers of attorney. When a family in Forney creates an estate plan, they should know the requirements for executing those documents to ensure their validity. Otherwise, invalid estate planning documents could lead to unintended consequences when passing family wealth from one generation to the next.
#4: Not Having Powers of Attorney or Healthcare Directives
A family member’s incapacity can become a stressful experience for their family. For example, a loved one may end up in the hospital due to a medical emergency, or an older family member may experience a gradual decline in mental capacity. Without estate planning tools like powers of attorney and healthcare directives, families can face challenges such as disputes over who should make decisions on behalf of a loved one or the need to seek a court-ordered guardianship or conservatorship for an incapacitated family member.
#5: Overlooking Beneficiary Designations
Families may have assets such as bank accounts, brokerage accounts, retirement accounts, annuities, and life insurance policies that permit the asset holder to designate a beneficiary who will assume ownership of the asset or receive the funds upon the asset holder’s death. These beneficiary designations allow families to pass wealth to loved ones without the time and expense of probate. Without a beneficiary designation, an asset becomes a part of the decedent’s estate and thus subject to probate.
#6: Creating an Estate Plan without Legal Guidance
Families who undertake estate planning without the guidance and support of a knowledgeable attorney may make serious mistakes that can undermine the effectiveness of an estate plan. An estate planning lawyer can help families identify appropriate estate planning tools, properly execute documents, and revise estate plans in response to changing circumstances.
Contact Our Forney Estate Planning Lawyers Today
Have you begun developing an estate plan for yourself and your loved ones? Contact Guest & Gray today for a free, confidential consultation with a Forney estate planning attorney to learn more about the estate planning process and the potential mistakes that your family should avoid when crafting an estate plan.
