Don’t Make These Estate Planning Mistakes

I know that I have written in the past about estate planning, but as time passes, we see more and more issues arising from estate planning mistakes – omissions, improper forms, improper titling or non-titling of assets, and not taking special circumstances into consideration.

In our day-to-day administration of estates, we encounter many challenges and some of these challenges could have been avoided with proper estate planning.  I know that a well-designed estate plan can be an unwanted expense, but it is the one way to ensure that your wishes are carried out, that your beneficiaries are protected, that your documents are complete and address all of your concerns.

So, what can you do and what should you not do?  Here are a few suggestions:

  • First and foremost, remember that if you die without a will, the intestate laws of your state of residence will prevail as to who inherits from your estate as well as who is entitled to administer your estate.
  • I have long said that one of the best investments one can make is a good estate plan (and I don’t say that to generate business for any attorney but for the benefit of those left behind). 
  • It is very tempting these days to use online templates for a will or a trust.  But, remember, these forms are not state-specific and may not meet the requirements of your state of residence.  These forms may not provide for addressing certain special situations – beneficiaries who have special needs, who may be on the verge of a divorce, who may be in a financial situation and inheriting could provide access to the inheritance by their creditors, having alternate provisions for the “what ifs”.  And this is only the short list of special situations.
  • Give full consideration to naming your executor or estate representative.  There is nothing that says your oldest child, your oldest son, naming all children, or even your spouse has to be named.  You could have very valid reasons for not wishing for them to serve.  After all, being an executor is akin to having another job and there are responsibilities that go along with being an executor.  The best person is someone who is organized, good with finances and paperwork.  Do you feel comfortable that this individual will carry out your wishes? 
  • Don’t assume that because you told so and so that they could have your “whatever” when you die, that this will hold firm.  Nor should you assume that if you put a sticky note on the bottom of that one lamp with someone’s name on it that the lamp will go to that person.  Only if there is proper documentation will you be assured that the items will pass as per your wishes.
  • Do your documents provide for incapacity?  If you should become incapacitated to make your own decisions, are your documents still valid?
  • Have you created a trust and funded the trust?  If no assets were put into the trust, the trust can’t provide its intended use.

Make certain that your estate plan is well prepared to meet your needs and wishes.  It can certainly be one of the best investments you make.

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About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent, an Accredited Estate Planner®, and a Certified Trust and Fiduciary Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

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