5 Mistakes to Avoid When Updating Your Estate Plan

According to some estimates, only 33% of Americans have an estate plan, and if you’re one of them, you’re already ahead of the curve. If you’ve taken the time to update your estate plan, that’s even better. However, mistakes could leave your heirs and beneficiaries in a bind, and working with an estate planning lawyer could prevent conflict among your heirs after your death.

1. Forgetting to Update Auxiliary Documents

Perhaps you’ve updated your will or trust. However, if you don’t also update your powers of attorney, nomination for guardians of a minor or your health care directives, this could be a problem. Although technically these auxiliary documents remain valid, that doesn’t mean you should overlook reviewing them and updating them as needed. For example, a nominated guardian’s address may have changed, or you might prefer someone else now that your child is older if you initially selected a guardian when your child was an infant. You might need to draft a new power of attorney if the agent you originally selected passed away or has become incapacitated.

2. Using Erroneous Reasoning

If you have multiple children, perhaps you chose a guardian with a big house or a lot of money to provide for their needs. Maybe you picked a guardian based on their career or age. This might not be the best person for the purpose. Proximity, time and lifestyle may be more important factors to consider when selecting an agent for a purpose in your estate plan, will or trust. You might be better off picking one capable person instead of three separate individuals to handle different aspects of your estate.

3. Not Meeting With Your Financial Advisor

While an estate planning lawyer can review your estate plan, they’re not necessarily the best choice to review your tax situation, investments and other financial details. Any time you update your estate plan, schedule a meeting with your financial advisor. You may need to update designated beneficiaries on investment, life insurance or other accounts.

4. Skipping Updates After You Move

Long gone are the days when people bought a house and stayed in it for 40 to 50 years before retiring. These days, people tend to move more frequently for work or personal reasons. Even if you only moved once after retiring or emptying your nest, it’s important to review your estate plan. If your move was across state lines, the new state might have different requirements for estate plans. Having out-of-state documents could throw a wrench into the distribution of your assets or the exercising of health care or power of attorney activities. If you no longer live in New Jersey and have permanently relocated to Arizona, for example, it’s time to update your estate planning documents to reflect your current location and the new state’s legal requirements.

5. Losing Track of Your Assets

Perhaps you bought a new piece of art or you inherited some jewelry after the passing of a relative. You’ll need to update your estate plan to reflect these new assets. If you invested in a new property, bought a boat or a Ferrari or your investment portfolio moved to another management firm, these also require updates to your estate plan. Most people have their assets spread across types and companies, and maintaining a cheat sheet, list or other document of what you have and where it is will make your trustee’s life easier and the probate process smoother. Mistakes don’t have to be inevitable when updating your estate plan. By working with an estate planning lawyer, you can ensure that everything in your estate plan meets your preferences and the requirements of the law. For more details about ensuring your New Jersey estate plan updates are correct, call the Hackensack office of The Knee Law Firm at 201-996-1200 to schedule a consultation. You may also enter your details into our online contact form, and an associate will reach out to you to schedule an appointment.