As a physician you most likely come face-to-face with issues of mortality daily. You would think, therefore, that doctors would have their affairs in order. This isn’t always the case. According to a Caring.com survey, only 4 in 10 American adults have a will or a living trust. And what may be even more surprising is that younger adults are outpacing their middle-aged and older counterparts when it comes to estate planning. Young adults with wills increased by 63% since 2020. Well, if it takes a pandemic to get you to put your affairs in order, so be it.
Estate planning is crucial if you want to make sure the wealth you built over a lifetime is distributed according to your wishes and that your family is taken care of. Kiplinger cautions that many fall prey to common estate planning mistakes that can easily be avoided. Here are some basic estate planning errors that can have big consequences.
- Not having a will. This one is obvious, but time and again families are left in a tangle of probate red tape because someone never got around to writing a will. Identify a lawyer with training in estate planning and make an appointment. Once you have your will, and again this is obvious, make sure several trusted family members know where it is located and are able to access it.
- Underestimating life insurance. You may have bought life insurance when you and your partner purchased your first home and have simply kept it as it. Well, after three kids and a home upgrade, it may be time to revisit your policies. Although every doctor’s situation is different, what is true across the board is that inflation, rising college costs, and other increased expenses are a fact of life. Make sure your life insurance matches your lifestyle, so that it can be preserved for your loved ones when are gone.
- Not consulting an accountant. This is a big one. Tax laws are constantly changing and a skilled accountant with experience in estate planning is an invaluable member of your financial planning team. Lack of tax planning may be the biggest detriment to a solid estate plan.
- Avoiding the talk. No one likes this one, but the wishes you have for your estate will never come to fruition if you don’t talk to your family and loved ones about it. A will is important but communicating clearly and thoroughly with your family will go a long way in making a horrible situation survivable.
- Letting the plan sit. So, you completed a comprehensive estate plan with all of the corresponding documents. . . 10 years ago. Are your beneficiaries still up to date? Is your work situation still properly reflected in your estate plan (ie, have you started your own practice)? Have the kids graduated from college? Life evolves and so should your estate plan. Take time out once a year to review your plan in detail.