Estate Planning Mistakes, And How To Recognize Them

Estate Planning Mistakes, And How To Recognize Them


1. Make sure your Will is up to date. Even better, use trusts to avoid Probate and incapacity. Very often Revocable Trusts are the answer along with an updated Will.

2. Updated Revocable Trust. Why leave the burden of your passing on your children. Pre-plan. Revocable Trusts are simple to operate, avoids probate on the assets funded to the trust, and avoids court appointed guardianship  in the event of your incapacity.

3. Updated Durable Power of Attorney document in the event of your incapacity. This is a financial power of attorney for assets not held by your Revocable Trust. Such as Individual Retirement Accounts (IRA) and other qualified plans and Annuities.

4. Updated Living Will and Health Care Surrogate. Your Living Will authorizes someone to terminate life under certain circumstances. Your Health Care Surrogate authorizes someone to authorize surgery, medication and other health decisions. the health care decisions include changing doctors and other health care professionals (hospitals etc.).

5. Who should you choose as your Trustee and Personal Representative. this is the toughest question. A full discussion of that persons duties and obligations is in order. How they interact with your beneficiaries is critical. Sometimes a family member is appropriate, othertimes not.

6. Funding your Trust. A Revocable Trust works great to avoid probate and guardianship BUT to trust must be funded. Funding is accomplished by changing bank and brokerage accounts to an account set up in the Revocable Trust name. Real Estate is Funded by executing a deed to the Revocable Trust.

7. Jointly Held Assets. Are exposed to the creditors of the surviving spouse. A properly funded Revocable Trust may be able to avoid this Risk.

8. Beneficiaries. Make sure the beneficiaries are protected from their creditors and their bad decision-making. Although a beneficiary is entitled to their inheritance at age 18, it may not be the best decision. Providing for their needs but still protecting them from unwise decisions make sense. Conversely, retaining control of their inheritance for extended periods without just cause may leave the beneficiary without the enjoyment of the assets. Special Needs beneficiaries need a different formula for success.

9. Update Your Beneficary Designations. Assets such as Life Insurance, Individual Retirement Accounts, Annuities and 401K are not Titled in the name of your Revocable Trust. Instead, they have beneficiary designations. Make sure they are current.

10. Current review of your Life Insurance and Annuities. Make sure your beneficiary designations are current and functioning as expected. New Annuities have many new features such as Long Term Care provisions. Traditional Long Term Care insurance premiums are an out of pocket expense. The New Annuities with Long Term Care Riders may be the answer.

11. As with all advice. Don’t try this yourself. Seek the assistance of a professional.



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