In our last post, we began discussing five common mistakes in estate planning, as pointed out by a recent Forbes article. We have already looked briefly at selecting the wrong guardian and failing to update beneficiary designations
Another common mistake in estate planning is to fail to ensure that medical powers of attorney and living wills are valid. Failure to do so can result in mistakes on the part of health care professionals. A medical power of attorney and living will is there to ensure your intentions are known in the event you are not able to communicate them. It is wise to ensure that your documents were properly executed and notarized.
Failure to notarize a power of attorney is common not only with respect to medical powers of attorney, but with durable powers of attorney in general. If the document expires and is not valid any longer, nobody can access your funds to help pay for your medical care, dispose of your property, or take care of other similar matters. So it is important to review your durable power of attorney with your lawyer.
A final area where mistakes are common in estate planning is having inadequate life insurance. According to a recent MetLife survey, over half of widows and widowers who collected life insurance proceeds got less than one year's income from their policies. Different people have different circumstances and so different coverage needs. You should review your coverage and looking into getting more if your coverage is inadequate.
Estate planning is an area where a number of mistakes can be made. We have mentioned only some of the more common ones. As a general rule, it is smart to assume that there are errors in your estate plan, and to review it with a critical eye.
Source: Forbes, "Five Crucial Estate Planning Mistakes You are Making," Nancy Anderson, December 15, 2011.