Estate plans are important tools for protecting your estate and its assets during your life. They enable you to pass your estate to designated beneficiaries, provide instructions for your end-of-life medical care, and give financial and medical powers to a trusted loved one or professional. Importantly, a comprehensive estate plan keeps the majority of your assets out of probate court, which saves your beneficiaries and family members significant time, resources, and money after you pass.
However, estate planning can be complicated. If done improperly, it can actually increase the stress and cost for your loved ones and prevent your wishes from being carried out. There are several common mistakes that the creators of wills and trusts may make that render their estate plan unenforceable or unable to care for their needs. Common estate planning mistakes include:
Not Having an Estate Plan
An estate plan can be anything from a simple will to several documents that protect your personal interests and those of your loved ones. No matter if you have an estate plan or not, an executor will manage your estate, either an executor named by you or one who is court-appointed. Frequently, a court-appointed executor is a family member who will have to manage your estate while grieving your loss. Without a trust, your entire estate will pass through probate court, and without a will, it will be distributed according to Oklahoma’s inheritance laws.
For some estates, a full probate process isn’t necessary, and a summary probate may be possible. Regardless of the type of probate, the process is long and costly, preventing your beneficiaries or heirs from accessing the assets in your estate while costing them court costs and legal fees. In addition to those costs cutting into their benefits, the estate may be impacted by federal inheritance and estate taxes. Probate court may take months to years.
Not Planning Soon Enough
Even if you feel like you don’t have a significant estate, estate planning is still important to begin sooner rather than later. If you wait to plan, your will or trust may be found invalid due to technical errors that you didn’t have time to review, or the designations may be unclear. By creating an estate plan very late in life, you increase the chances of a successful will contest claiming that you were not capable of signing a will. If the estate plan isn’t legally valid, your wishes won’t be followed.
Not Appointing an Executor
When you create a will, you name an executor who is in charge of your estate, your will’s wishes, and distributing the estate according to those wishes. If your estate plan includes a trust, you name a successor trustee. When you die, the successor trustee becomes the trustee, and they are responsible for the assets in your trust. Naming individuals who handle these responsibilities is important, as the court will appoint an executor if you don’t. You want to find a friend, family member, or professional who you trust to handle each of these roles. They will be responsible for handling your final wishes regarding asset distribution, the guardianship of your children, and creditor claims.
Not Naming Beneficiaries and Contingent Beneficiaries
When creating an estate plan, you want to plan for multiple beneficiaries for each asset. Without naming at least one beneficiary, the asset will be divided according to inheritance laws. Contingent beneficiaries are named in case the primary beneficiary dies before they can receive the asset. Without contingent beneficiaries, the asset will enter probate court. Naming one or multiple contingent beneficiaries is a smart estate planning choice.
Not Updating Your Estate Plan
Estate plans should be updated every three to five years and whenever an important life change occurs. Life changes can alter your wishes for beneficiaries, your healthcare, and your powers of attorney.
Q: What Are the Most Common Estate Planning Mistakes?
A: The biggest mistake that individuals make after their estate plan has been created is failing to update it. While creating a will, trust, and powers of attorney are great steps in estate planning, it is not the last part of the estate planning process. Frequently updating and reviewing the will is important, particularly after life changes such as divorce, marriage, growing families, and deaths of loved ones. Not only will this ensure that the will and trust reflect your current wishes and list accurate beneficiaries, but a clear line of past estate plans may make it harder for will or trust contests to succeed.
Q: How Do You Avoid Probate in Oklahoma?
A: One of the most effective ways to get your estate to avoid probate court in Oklahoma is by creating a living trust. While a will is a good estate planning tool, it doesn’t prevent your estate from entering probate. By creating a living trust, also called a revocable trust, the assets remain in your legal control and pass to the ownership of the successor trustee after your death. Your beneficiaries can benefit from the assets more quickly, without going through the lengthy and expensive process of probate.
Q: What Is the Biggest Mistake That People Make With Their Wills?
A: The biggest mistake that individuals make while creating their wills is failing to match beneficiary designations in their wills with beneficiary designations on assets. This can cause disagreements that lengthen probate, as beneficiaries and heirs argue the deceased’s wishes. The creator of the will may have designated a beneficiary in their will but failed to change the asset’s beneficiary. Because the asset’s beneficiary is generally prioritized, an individual whom the deceased did not wish to receive the asset may benefit from it.
Q: What Are the Rights of a Beneficiary in Oklahoma?
A: Beneficiaries may be individuals or organizations who benefit from an individual’s estate. The rights of a beneficiary in Oklahoma include:
- The right to be notified when the probate process begins
- The right to be awarded the entirety of the assets in an estate awarded to them
- The right to object to or contest decisions regarding the estate
- The right to file a claim if an executor or trustee breaches their fiduciary duty to beneficiaries
Understanding Your Estate Plan
An experienced estate planning attorney can help you determine what you want your estate plan to accomplish while working to meet those goals. Contact Stange Law Firm today to see how we can help you create and manage a comprehensive estate plan.