One of the biggest mistakes one can make when planning for the future is to die intestate (without a will), but even those who manage to craft a last will and testament make errors that leave their last wishes in jeopardy. The elderly are particularly susceptible to overlooking important details. A few of these common errors include not pre-planning funeral arrangements, not taking advantage of tax exemption laws, not vouchsafing power of attorney and failing to readdress advanced medical directives to be followed in the event of illness or incapacitation. For more on this continue reading the following article from JDSupra.
As we grow older, our estate-planning needs change. Many seniors may mistakenly think a last will and testament is all they need to satisfy their estate plans. But that’s often not the case. Today, let’s look at the five most common estate-planning mistakes that seniors are likely to make.
5. Not pre-planning funeral arrangements. Some people may feel uncomfortable with the idea of pre-planning their own funeral. But as you age and attend services for others who have passed away, you’ve probably started to think about your own funeral, memorial service and burial. Do you want a simple or elaborate service (or no service at all)? Are there favorite songs you’d like played? Prayers recited? Would you prefer to be buried or cremated? Pre-planning your funeral allows you to take the burden off of your family and gives you control over your funeral arrangements.
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4. Not taking advantage of tax-exempt gift laws. Under US tax law, you can give a financial gift of up to $13,000 a year without having to pay taxes on the money. This tax-exempt gift allows you to reduce the overall size of your estate, which may help minimize estate taxes after your death. It also lets your heirs immediately benefit from the money. (You can also give non-cash gifts—such as stocks or real estate—worth up to $13,000 a year without being taxed.)
3. Not discussing estate planning details with their loved ones. While you’re alive and in relatively good health, you’ll want to discuss several estate-planning details with your family and loved ones. Before writing your last will and testament, talk to the person you’d like to act as your estate’s executor. Are they comfortable taking on the responsibility? And even if you’re not comfortable sharing the specifics of your will, you’ll want to let family members know where your last will and testament is stored, so they can easily locate it after you pass away. Also consider sharing your end-of-life wishes: Have you created a living will? If so, what instructions have you left? Have you pre-planned your funeral? Where can those details be located?
2. Not creating a springing or durable power of attorney. A power of attorney lets you designate someone— known as your attorney-in-fact—to make certainly legal and financial decisions on your behalf. Typically a power of attorney is invalidated if you become incapacitated. As you grow older and health concerns become more pronounced, consider creating a springing power of attorney (which only goes into effect if you’re incapacitated) or a durable power of attorney (which remains effective even if you’re incapacitated). Either a springing or a durable power of attorney will allow your attorney in fact to pay bills, move money and take other legal and financial actions if you’re unable to perform these tasks yourself.
1. Not regularly revisiting their advanced medical directives, including healthcare power of attorney and living will. Similar to a financial power of attorney, a healthcare power of attorney allows you to name someone as your healthcare surrogate, empowering them to make medical decisions on your behalf if you become incapacitated. A living will allows you to share your end-of-life decisions: Do you want a do-not-resuscitate order? If your body is failing, do you want to be kept alive using artificial means? How much pain medicine would you like? What life sustaining treatments—such as dialysis and fluids—would you like to receive? As friends and family members grow other, your attitude towards life-sustaining treatment may change. It makes sense to regularly review your advanced medical directives, update the documents if your wishes change and share the new documents with your family and medical providers.