fbpx

Big Estate Planning Mistakes You Can (and Should) Avoid

MistakesGood luck to your loved ones when you die, because you are going about your estate planning all wrong. According to a recent study from the Center on Wealth and Philanthropy at Boston College, an estimated $59 trillion will be transferred from 93.6 million American estates between 2007 and 2061. However, there is far less clarity about where those assets are going, since those currently holding them can't be bothered to update their estate planning documents or inform potential beneficiaries about their plans.

A recent article from The Street,"5 Biggest Estate Planning Mistakes You Can Make," tells us that more than half (56%) of U.S. parents have a will or living trust document, according to a caring.com survey of adult children. About one-third of parents (27%) don't have estate documents in place, and 16% of adult children have no idea about what's in their parents' estate plans. Another statistic in the clueless area: when parents have an estate in place, sometimes their adult children don't know where these documents are kept—52% of adult children don't know where their parents keep their estate documents, and 58% don't know what the estate planning documents say!

The article cautions that even when you have a will or a trust, there's no absolute guarantee that your assets will be distributed without a hitch. Wills and trusts have kept families in litigation and at odds with each other for years if the estate plan isn't administered properly. To make things easier for your family and make sure your wishes are carried out properly after you pass, try to steer clear of these monstrous errors:

1. Sibling Rivalry. When people fight over their parent's estate, they typically hand over a sizeable piece of their inheritance to the attorneys hired to represent them. If the deceased's children didn't get along while their parent was alive, it will be only the same or worse now. Parents should mitigate this by discussing their estate plans with their heirs before they die. A little explanation, the article reminds us, can go a long way.

2. Unanticipated surprises. What other kind of surprise is there? "Planned surprises?" One critical issue that many times winds up in litigation is the way that the estate taxes are apportioned. They are either written in the will or totally neglected. So for example, the will might say, "I give my house to my daughter Betty, and the estate taxes on this is paid out of revenue." This way you make sure that your estate will be taking care of the estate taxes on the items distributed.

3. Forgetting about your estate plan. Update, update, update! Keep up with your estate planning attorney and let him or her know about new news—like your recent divorce and remarriage or the birth of your first grandchild. If you fail to account for these types of life changes in your family life, you are leaving estate planning leaves your legacy up for grabs. If you thought a divorce, a remarriage, or the blending of families is a major deal during life, after your death—if you don't address your specific wishes—if may be an even bigger nightmare. Talk to an estate planning attorney about a trust for this situation to shield everyone from potential legal repercussions and to ensure your assets go where you designated.

That survey also found that of those that have a will, only 40% have updated it in the last five years, and 25% of adult children don't know if their parents' will has ever been updated.

4. Think about whether to name co-trustees. Some people feel better with their estate planning knowing that their spouse or child will be part of the process. But if they don't have the time, patience and business sense to handle the responsibility and liability of the position of trustee, there's no reason for co-trustees and added stress. This "two-headed" approach may work in some situations but the reason for having only one trustee is that he or she can make swift and decisive decisions. It's hard for a trustee to do so when he or she is acting by committee, even if it's only two people.

5. Watch for undue influence. Personal caregivers can help with the care for your mom or dad, but some have placed themselves in estate plans by exerting pressure and by unscrupulous means during a very fragile and vulnerable time.

Avoid these and other mistakes that can derail your estate planning strategy. Talk to a qualified estate planning attorney and create a sound and safe estate planning strategy.  You can learn more about this topic as well as other strategies on our website under the tab entitled: estate planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.  However, proper estate planning is not a do-it-yourself project.  Why not call us for a complimentary consultation at 757-259-0707.

Reference: The Street (July 13, 2015) "5 Biggest Estate Planning Mistakes You Can Make."

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest

Leave a comment

LIKE THIS POST?

We have a LOT more where that came from!

We hate spam too. We will never share or sell your information.

Call Now ButtonCall Us Now https://jsfiddle.net/7h5246b8/

Request a free consultation

We hate spam too. We will never share or sell your information.

We've been putting together as many resources as possible so that we can continue to help:

  • If you’re a current client with a signing appointment or a prospective client with a consultation and would prefer that meeting take place in your own home, we can accomplish that with a little bit of pre-planning on our part and with the addition of a laptop, smartphone, tablet or other computer in your home to facilitate this virtual meeting. For those of you that need to sign legal documents, that too can be accomplished with the use of a webcam (FaceTime etc.), so that we can witness and electronically notarize all of your important legal documents.
  • We launched the rollout of our on-demand webinar early so that new clients and our allied professionals can view the important component parts of ‘an estate plan that works’ at their convenience.  That is available on our website.
  • Live video workshops will be produced as quickly as possible and certainly ahead of our previous schedule; we will keep you posted as these events become available. Given the ‘boutique’ nature of the firm, we rarely have more than ten people in our office including team members at any one time. During this period of ‘social distancing,’ we promise to have no more than 8 people at any time.   This allows us to comply with the Governor’s directive to limit in-person gatherings.
  • The best way to communicate with us is still by phone during regular office hours of 8:30 to 5:00, Monday through Friday, or, you can email any of our team members (that is, their first name followed by @zarembalaw.com).  We will respond to these emails as quickly as possible.
  • Please continue to follow the directives of our local, state, and federal agencies. For your health and in consideration of our team who is assisting you, if you’ve scheduled an office appointment or planned to drop off paperwork and are experiencing a fever, dry cough, or shortness of breath, please contact your primary care doctor for guidance and then our office to reschedule.

Thank you, Walt and the Zaremba Team

Coronavirus/Covid-19
Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.