Often, when I’m asked by people to explain what I do for living, I get a sense that they’re sorry they asked. Perhaps it has to do with the fact that no one enjoys a conversation about death – especially their own! Maybe it could be their mistaken impression that with the estate tax exemption now set at $5 million per person for the next two years that there is no longer a compelling reason to consult an attorney about estate planning. That's simply not the case. Putting aside the issue of estate taxes, failure to properly plan still can mean unnecessary expense, confusion and conflict for the loved ones you leave behind.
SmartBusiness last week highlighted the fundamentals of a “well-thought-out estate plan,” with topics that everyone should consider – whether they are a prince or a pauper. Add to that that this article agrees with everything I have been preaching for the last 15 years of my practice and I couldn't resist offering you a review. Here it is:
Why do you need an estate plan? A comprehensive estate plan ensures that your estate id distributed according to your wishes, provides protection for your in the event of your own disability, and allows you to plan for minor children, pets, and charitable causes.
Can I write my own will? You certainly can, and there are many online sites to help you do so! However, as in most things of life, you do get what you pay for. Last week I reviewed a will for a gentlemen in which he’d had ‘helped himself. I had to diplomatically point out to him that he had a fool for a client since his will was not properly witnessed. He had no ideas what the laws of Virginia were. However, it is no secret to anyone that improperly drafted or hand-written wills are frequently are contested and invalidated in court. If you don’t know what you’re doing, the outcome could be so much different than you expected.
What should every estate plan have? SmartBusiness recommends financial and health care powers of attorney and a living will. I agree, but would expand that list to include at least a Last Will and Testament.
What about trusts? Many people choose to create trusts to help their heirs avoid probate. There are so many more equally relevant reasons to create a trust that go beyond the probate issue however, not the least of which is that trusts can help shield assets from loss to due to unforeseen circumstances, such as the bankruptcy, divorce or lawsuits of your heirs.
What mistakes do people tend to make in estate planning? The writer points out two common mistakes: failure to plan for their personal effects, and failure to review and update their plans over time.
You can learn more about comprehensive estate planning in on our website. You also may want to review the November issue of our estate planning newsletter which focuses on how to get (and keep) your legal affairs in order.