A friend recently told me how, every Easter, her mother-in-law hosts the entire family in her home. It’s an exciting gathering, as the guest list includes everyone from great-grandparents to adopted neighbors. Last year, as this friend sat in her MIL’s living room, enjoying ham and potatoes, she asked how she pulls it off. And this is what the mother-in-law said…
She makes everything hours—sometimes days—ahead of time, then sticks it in several slow cookers of various sizes and, essentially, forgets about it. This “set it and forget it” mentality allows her to enjoy time with her family without the worry.
That “set it and forget it” approach works beautifully for family dinners. But when it comes to your estate plan, taking the same approach can lead to a very different outcome. Estate plans aren’t slow cookers. They are more like the Easter ham in the oven. They require regular check-ins and thoughtful updates. Otherwise, you risk serving your family a heaping portion of confusion and unintended consequences when the time comes.
Here are five common estate planning mistakes we see when people take a “set it and forget it” approach:
5 Estate Planning Mistakes People Make When They “Set It and Forget It”
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Not Updating Beneficiaries
If your estate plan hasn’t been touched in years, your life has probably changed, and your plan needs to reflect those changes. Beneficiaries may no longer be part of your life, or your wishes may have evolved. Think of the great-grandchildren around that Easter table. Just a few years ago, they were too young to appreciate heirlooms. But today, one of them might treasure great-grandpa’s war medals or great-grandma’s car. If the estate plan hasn’t been updated, those keepsakes could end up in the hands of someone who doesn’t value them the same way. -
Not Planning for Incapacity
Do you know who you want to make decisions about your medical care? Is it that same person willing—or even able—to help? What about financial decisions while you’re busy receiving medical care? Who makes those? (Read more about this topic here.)
If you’ve experienced new health challenges, medical insurance changes, or a shuffling of the responsible people in your life since the last time you updated your Estate Plan, you could find yourself in a vulnerable situation with outdated health and financial directives. This can be inconvenient, expensive, or downright dangerous, depending on the situation.
The mother-in-law above has been helping her own mother manage health decisions for over a decade. As her mother’s needs changed, they updated the estate plan together. When a recent medical emergency arose, everything was in place: the right documents, the right powers of attorney, the right decision-maker. That preparation made all the difference! -
Not Reviewing State-Specific Laws
Have you moved to a new state recently? If so, you understand the unique adventure of navigating new local laws and procedures. Can I turn right on a red light? How does trash/recycling pickup work? Will the grocery store give me bags, or should I bring my own?
Of course, estate law works in much the same way. If you established your Estate Plan in one state, you may need to make changes to ensure that it still functions correctly in your current state. For example, Virginia has what’s known as an Anti-Lapse Statute, designed to fulfill your intentions for your assets if one of your beneficiaries dies before you do. If you’re new to Virginia, your Estate Plan may not be written with this type of statute in mind. You’ll need to revise it or risk your assets being distributed differently than you had hoped. -
Overlooking Digital Assets
Technology changes so quickly these days, and even those of us who grew up in a simpler time often feel the pressure to keep up with it. Many of us have online accounts with ever-changing usernames and passwords; some of us also own digital investments, such as cryptocurrency. A good Estate Plan considers these digital assets and contains up-to-date information that your loved ones need to fulfill your wishes.
For example, cryptocurrency is a relatively new category of asset, and courts don’t always know how to handle it. In addition, accessing someone else’s cryptocurrency isn’t as simple as older forms of investments. It’s better to be specific and thorough, and to keep your Estate Plan current when cryptocurrency—or any digital assets—are involved. Failure to do so could lead to confusion and extra fees for your loved ones. -
Ignoring Family Dynamics
If your family has recently experienced a marriage, divorce, estrangement, birth, or death, it’s time to update your Estate Plan. Any life event that produces a change in family dynamics should prompt a review of the documents that impact that family. Otherwise, the inheritance process could be mired in disputes and confusion, leading to stress and hurt feelings for all.
For example, in Virginia, a divorced spouse is automatically disinherited from a Will, but the assets that would have gone to them can end up in a few different places, depending on the wording of the Will, the decisions of the courts, and the desires of other family members.
>A better option is to update Wills and other documents to accurately reflect your family situation, clearing up confusion before it happens.
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How to Avoid These Estate Planning Mistakes: Holistic Planning
The best way to avoid these issues? Don’t treat your estate plan like a slow cooker. Remember that estate plans need care and attention, much like that Easter ham.
At Promise Law, we offer support at every stage of the planning process:
- Attend an in-person and on-demand workshop to learn more
- After attending a workshop, schedule your complimentary consultation
- Enroll in our PIE™ Estate Plan Maintenance Program to keep your plan up to date
For more information, call us at 757-384-9819, or contact us through our website.
