No one enjoys contemplating their own demise. Sadly, it's true that one cannot avoid death or taxes, but careful estate planning can alleviate much confusion for loved ones. Arizona residents who are preparing to undertake this task may benefit from learning what common mistakes can undo their best intentions.
The first mistake is not having any plans in place. An estimated 58 percent of adults have failed to prepare even simple plans; those with minor children are even less prepared, as only approximately 36 percent have plans in place. If one puts off planning, heirs could be impacted if an estate exceeds the exemption cap. It is also imperative to have health care directives and power of attorney paperwork in place in the event one becomes incapacitated. Not having a preferred individual prepared to make important health care and financial decisions could mean that the courts will appoint someone to make these vital decisions.
Likewise, for parents of minor children, it is important to select a guardian who can fulfill these responsibilities if the need arises. Another error is neglecting to update documents after a major life change. While it may seem appropriate to ensure that children are equally provided for, this may be counterproductive, depending on the needs of the individuals involved. For those who have set up a revocable trust, failing to title assets over to the trust defeats the intended purpose.
Two other common errors include forgetting to update an advisor on pertinent changes that could impact one's plans and failing to educate children on how to properly manage their future wealth. While estate planning may seem to be an unpleasant task, it can make the difference in ensuring that one's hard work is preserved for future generations. Arizona residents may benefit from seeking the guidance of an experienced attorney to ensure that one's plans will best fit their unique circumstances.