Most everyone is aware how important it is to have an estate plan. Far too often however, they procrastinate and do nothing about. While no one likes to think about their own morality or the possibility of incapacitation, you can only plan before these events occur.
Solution: Schedule a meeting with a qualified estate planning attorney to discuss your situation. Every situation is different so meeting with a qualified attorney is very important.
2. Not Having a Will.
Most people do not even have a basic will. A will is very helpful in nominating who will be responsible for administering your estate and how your estate assets will be distrusted after the payment of your funeral, medical and other expenses.
Solution: In this instance you should also schedule a meeting with an estate planning attorney to discuss how a will could benefit you and your family.
3. Not Having Powers of Attorney.
Planning for death is only part of estate planning. There is a very real possibility that at some point before you die, you will be unable to pay your bills or make medical decisions due to a stroke or debilitating disease such as Alzheimer’s or Parkinson’s. In addition to a will, it is extremely important to have a Durable Power of Attorney and a Health Care Power of Attorney.
Solution: Not only should you meet with a qualified elder lawyer to discuss completing your estate plan with a Power of Attorney. You should also talk to your family to see who would be willing to step up to make financial and medical decisions on your behalf.
4. Failure to Recognize That a Will Won’t Avoid Probate.
Probate is the legal process in which assets are transferred after a person has died. While a will ensures that your wishes are carried out throughout the probate process, your family will still have to pay the court fees and deal with the hassle of probate court.
Solution: When meeting with an estate planning attorney it is important to consider estate planning options other than a will. One of these options is a trust which will avoid probate.
5. Failure to Consider a Trust.
Far too many people believe that a trust is only for the wealthy. They also fail to understand how expensive and time consuming probate can be. A trust also offers more flexibility in leaving assets for the education of grandchildren or for special needs family members. Because a trust goes into effect at signing (not upon your death like a will) it can also provide provisions for the possibility of incapacitation.
Solution: It is important to meet with a qualified attorney and discuss the pros and cons to a will and a trust so you can make the best decision for your particular situation.
6. Failure to Change the Title of Assets into a Trust.
For those who decide a trust is right for them, simply signing the trust is only part of the process. Assets such as a home or other real estate, bank accounts, stocks, bonds, etc. must be transferred into the name of the trust in order to avoid probate.
Solution: An estate planning attorney can assist you in retiling all your assets.
7. Doing it Yourself.
While everyone like to save money, the old adage that you “get what you pay for” is particularly true in estate planning. If your family’s time and money is important to you, it is recommended that you do not attempt to do your estate planning with information you read online or with a generic internet practitioner. The reason is that every situation is unique and a generic will or online information is not tailored specifically to you. There is a good chance that if your do your estate planning yourself, you could leave out assets or an important provision or document.
Solution: You estate plan should be done with the assistance of an attorney who has significant experience in assisting others with situations similar to yours. A certified Elder Law Attorney (CELA) or a member of the National Academy of Elder Law Lawyers (NAELA) is often a good indication of his or her legal specialty.
8. Putting Children’s Names on Bank Accounts, Deeds, etc.
Adding children to bank accounts, real estate or other assets is often the surest way to create problems after your death. It is often much better to transfer these assets after your death instead of sharing or co-owning the assets during your lifetime.
Solution: An elder law attorney can help you prepare your estate plan so that your children will receive these assets after your death.
9. Incorrectly Naming Beneficiaries.
A good estate plan must also consider those assets that have a beneficiary designation, such as life insurance, IRA, 401K, etc. The failure to correctly name both primary and secondary beneficiaries can undermine even a well drafted trust or will.
Solution: A qualified elder lawyer will be able to look at your assets and determine where primary and secondary beneficiaries are needed.
10. Failure to Periodically Review Your Estate Plan.
A will or trust drafted 5 years ago may not be appropriate for you now. As your circumstances change or new laws are enacted, you estate plan may need to be revised.
Solution: It is recommended that you review your estate plan every three years (unless your situation requires more frequent review) to make sure it still reflects your wishes.