If you want to know if you need to start the Estate Planning process, ask yourself if you want to have some say during your life how your property will be distributed after your life. Also ask yourself, how will health care decisions be made if you are incapacitated. The American Bar Association recomends that you engage in Estate Planning in order to provide for your immediate family; to reduce stress on your family; to help a favorite cause; and to choose your Executor or Trustee. If you want to have input then watch out for these five things as you prepare to make decisions about your property and your health. You may also wish to name a guardian for minor children and be able to choose your beneficiaries.
ESTATE PLANNING MISTAKE #1
Thinking you don’t need a Will or an Advance Directive for Healthcare. We live in a society where SUVs rule the road, we use airplanes for travel, shootings can happen on college campuses and other dangers and illnesses can befall us. Having a Will and Advance Directives for Healthcare make sure you are prepared in the event that you are incapacitated or die. Having a Will should be part of your financial “to do” list. It is the only way to really have control over the decisions you would make if you were there to make them.
ESTATE PLANNING MISTAKE #2
Not telling anyone about your Will or other Estate Planning documents. At a minimum you should tell your personal representative about your Will and also provide that person with the location of the Will. If you die and no one knows that you made a Will or where it is, then it may not be implemented. In addition, if you wish to discuss with your family members how you will distribute your posessions, you may wish to do it sooner than later. There may be animosity and disagreements, but you can deal with it now. Once you are gone it will be too later.
ESTATE PLANNING MISTAKE #3
Not using a Trust to avoid the probate process. Generally assets in a trust pass outside of probate. This may allow your beneficiaries to have access to your assets faster than they would under a Will. A testamentary trust is a trust that is outlined in a will and funded after death with funds subject to probate. A revocable living trust is a trust created that allows your assets to pass outside of probate, but also allows you to be names as Trustee during your life so that you can control the assets during your lifetime. In order to fund a revocable living trust, your assets must be titled in the name of the trust.
ESTATE PLANNING MISTAKE #4
Not updating your Will. Life happens. If you executed your Will many years ago, it may be time to update it. Maybe you didn’t have children at the time. Maybe you were married. Maybe you disposed of or obtained property. Your will should correctly identify your family and assets, so its good to periodically update it.
ESTATE PLANNING MISTAKE #5
Asking the wrong person to serve as Personal Representative. This decision should be made with the idea that the best person for the job should be chosen. It may be someone who will be seen as impartial and fair. It may be someone who will faithfully execute the duties of the position. A lot of thought should go into this decision, this person will have to implement your wishes and handle administrative tasks involved in probate.
ESTATE PLANNING MISTAKE #6
Neglecting to meet with a legal, financial or tax professional. Although there are many “do it yourself” options for drafting Wills and other Estate planning documents, if you have any doubts about whether what you are doing is legally sound, or actually accomplishes your wishes, you may wish to consult with an attorney, and a tax or other financial professional to discuss tax implications.