For many individuals, the ability to determine how their estate assets are distributed is the primary motivation for creating an estate plan. Simply having an estate plan in place, however, is not enough. Ensuring that your plan is thorough and well-crafted is equally crucial because a poorly devised or incomplete plan might unintentionally lead to leaving behind an intestate estate. To help you ensure that your estate plan achieves its intended purpose, the attorneys at Wilcox Attorneys, PA discuss failing to distribute your entire estate, which is among the common estate planning mistakes to avoid.
Your Estate Planning Objectives
When you think about estate planning goals, your focus is likely on directing the distribution of your estate assets after your passing. Most people create an initial estate plan, often comprising only a Last Will and Testament, driven by the desire to pass their assets down to chosen beneficiaries. Over time, your estate plan may evolve to include additional strategies and tools such as trust agreements, jointly held assets, retirement accounts, and various other interconnected components to accomplish various estate planning goals and objectives. As your estate plan grows in complexity, it becomes increasingly important to ensure that it is well-considered and professionally drafted to ensure it functions as intended.
Avoiding Estate Planning Mistakes: 3 Ways You Might Fail to Distribute Your Entire Estate
Another significant advantage of having an estate plan is the assurance that you won’t leave behind an intestate estate. Dying intestate means passing away without even a basic Last Will and Testament. If you do leave behind a Will (or trust), its terms dictate how your estate assets are distributed. In contrast, in the case of an intestate estate, state intestate succession laws govern asset distribution, typically resulting in only close relatives inheriting from the estate. Despite your intention to avoid leaving behind an intestate estate, you might inadvertently do so if you make one of the following common mistakes:
- Opting for DIY Estate Planning: It might seem convenient to use do-it-yourself (DIY) estate planning forms from the internet to save time or money. However, this approach increases the likelihood of documents failing to synchronize effectively, thus raising the risk of asset exclusion and the subsequent creation of an intestate estate. Ultimately, this could end up costing your loved ones more time and money.
- Neglecting to Execute a Pour-Over Will: While a trust can be used to distribute some or all of your estate assets after your passing, it’s essential to consider the possibility of inadvertently overlooking certain assets or failing to transfer recently acquired assets into the trust before your death. To prevent the creation of an intestate estate, include a Pour-Over Will in your estate plan. This document “pours over” overlooked or late-acquired assets into a trust following your passing.
- Failing to Plan for Predeceased Beneficiaries: When naming beneficiaries in your estate plan, be sure to include contingent beneficiaries to avoid leaving behind an intestate estate. If a named beneficiary predeceases you, and your estate plan doesn’t account for this scenario and direct asset distribution to someone else, those assets could end up being distributed according to the state’s intestate succession rules. To mitigate this risk, collaborate with an experienced estate planning attorney to ensure that all potential outcomes are considered in your plan.
Can We Help You Avoid Estate Planning Mistakes?
For additional information, please sign up for one of our FREE estate planning webinars. If you would like assistance to avoid estate planning mistakes, including failure to distribute your entire estate, contact the experienced Washington County, Fayetteville, Springdale, Rogers, Bentonville, and Northwest Arkansas estate planning attorneys at Wilcox Attorneys, PA by calling 479-443-0062 to schedule your appointment today.
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