Common Denver Estate Planning Mistakes
Organizing and planning your estate can be a daunting task. There are so many things to consider, and it is easy to make mistakes. Unfortunately, even a small mistake in your estate planning can have major consequences for your loved ones. Some of the most common Denver estate planning mistakes include the following:
1. Not Having a Will
One of the most common estate planning mistakes is not having a will. If you die without a will, your assets will be distributed according to your state’s laws of intestacy, which may not be how you would have wanted them to be distributed. In addition, if you have young children, you need to appoint a guardian in your will so that there is no question about who will take care of them if something happens to you.
2. Not Updating Your Will
Your will should be reviewed and updated regularly, especially if there are changes in your family or financial situation. For example, if you get married or divorced, you will need to update your will. You should also update your will if you have children or grandchildren born after the will was created. Otherwise, they may not inherit anything from you.
3. Not Creating a Trust
A trust is another important legal document that can be used in estate planning. A trust is created when someone transfers ownership of their assets to another person (the trustee) for the benefit of someone else (the beneficiary). There are many different types of trusts that can be used for different purposes.
For example, a trust can be used to protect assets from creditors or lawsuits, minimize taxes, or provide for someone with special needs. Trusts can also be used in conjunction with wills to help ensure that your assets are distributed according to your wishes. Many people mistakenly believe that they do not need a trust because they have a will. However, having both can provide additional protections for your loved ones.
4. Failing to Update Your Beneficiaries
If you have a retirement account or life insurance policy, you likely named a beneficiary when you first opened the account or policy. However, things change over time, and it’s important to make sure that your beneficiaries are still up to date. For example, if you named your ex-spouse as the beneficiary of your life insurance policy but never changed it after getting divorced, they would still receive the death benefit, even if you remarried and had children with your new spouse.
5. Not Planning for Long-Term Care
Most people are not aware that Medicare does not cover long-term care expenses, such as nursing home costs. As people live longer and longer, the need for long-term care services becomes more prevalent—yet few people plan for it financially. One way to do this is by purchasing long-term care insurance; another way is by transferring assets out of your name so that they are protected from being used to pay for long-term care expenses.
6. DIY-ing It
Finally, one of the biggest mistakes people make is trying to do their estate planning on their own without the help of an experienced attorney. There are many online resources available these days—including do-it-yourself software programs—but nothing can replace the guidance and advice of a qualified professional who understands the ins and outs of estate planning and can tailor a plan specifically for your needs and goals.
If you have any questions about estate planning or would like assistance creating an estate plan, contact our office to schedule a Free Initial Meeting.