Estate planning, the creating of wills, trusts and incapacity planning documents such as durable power of attorney, is not always an easy topic to discuss and it is even easier to make mistakes with your estate plan. Our estate planning attorneys see many mistakes with people’s estate plans on a daily basis, both during their lifetimes and, even worse, upon their deaths. The reality is there are many ways to make estate planning mistakes. Here are some common ones we see:
- Not using an attorney to create your estate plan: We have seen a lot more of this recently, where people use Legalzoom or other drafting services to create their estate planning documents. We have seen so many mistakes with people creating their own estate planning documents. The bottom line is that your estate plan should not be left to on-line drafting services. A good attorney should help make sure you and your family are protected.
- Not using an attorney to change your estate plan: We have seen numerous clients change their documents themselves – without proper legal advice.
- Not using a good estate planning attorney: Not all estate planning attorneys are the same. Some attorneys do not stay on top of the law. Some attorneys do estate planning but also divorce law, criminal law and bankruptcy. Make sure you look at your attorney’s biography and what they do to stay on top of the law and legal trends. Here is a list of questions to ask your estate planning attorney.
- Not updating your estate plan often enough: Just creating your estate plan is not enough. You should likely review your estate plan with an attorney every five years or so. The law can change, your assets can change, your family situation can change, among many other important aspects.
- Not knowing what your will does: Your will only controls the assets that are in your own, individual name. Your will does not effect jointly held assets or assets with beneficiary designations like IRAs and life insurance policies. This means that you need to know what all of your assets are in creating your estate plan.
- Not creating a revocable living trust: In your consultation with a good estate planning attorney, ask if you should have a revocable living trust as part of your estate plan. Generally, a living trust-based estate plan may help save your family time and money when you die by avoiding probate.
- Not transferring assets to your living trust: If you have a living trust, you need to make sure your assets are owned by the living trust. This process is called funding your trust. Your estate planning attorney should help you with this as part of your estate plan.
- Have a living will and discuss your wishes with your family: A living will is an important part of your estate plan. This document is your written statement of your end-of-life wishes. Make sure your estate plan includes a living will and make sure you have discussed your end-of-life wishes with your family.
- Not taking into the account the cost of long-term care in your estate plan: Estate planning should have a number of goals, one of which is to discuss how your assets should be protected from the high cost of long-term care. If you end up needing in-home care or care in the nursing home, many if not all of your assets could disappear to the high cost of care. Your estate plan should consider how and when you should look to protect your assets from disappearing to the nursing home, such as purchasing long-term care insurance and irrevocable asset protection trusts.
If you want to learn more about estate planning, please feel free to download a copy of my book, the Top 20 Rules For Protecting Your Florida Estate.