Because estate planning involves actively thinking about and planning for frightening topics like death, old age and crippling disability, many people put it off or simply ignore it altogether until it’s too late. Sadly, this unwillingness to face reality often creates serious hardship, expense and trauma for those loved ones you leave behind.
To complicate matters, the recent proliferation of online estate planning document services may have misled you into thinking that estate planning is a do-it-yourself (DIY) affair, which involves nothing more than filling out the right legal forms. However, proper estate planning entails far more than filling out legal forms. Estate planning is definitely not a one-size-fits-all endeavor. Even if you think your particular situation is simple, that turns out to almost never be the case.
Last week we highlighted the first five of 10 of the most common estate-planning mistakes; here we wrap up the list with the remaining five mistakes.
Additional common oversights jeopardizing heirs include: Failing to update beneficiary designations for accounts like 401(k)s and life insurance which don’t transfer through your will, but rather obey beneficiary forms. If these outdated documents still list ex-spouses or “the estate” when you die, your true intentions get ignored while courts settle claims.
Botching the execution: You could have the best estate planning documents in the world but if you fail to sign them, or sign them improperly, they will fail. The validity of documents like wills hinges on strict signing and witnessing procedures that most DIY resources never explain. Break these rules, and your documents may get discarded, sending inheritance back to probate court.
Selecting unqualified executors/trustees: State laws are also very specific about who can serve in certain roles like executor, trustee or financial power of attorney. Requirements limit who can oversee certain estate administration roles, like family membership, in-state residency or bonding capacity rules. Name someone noncompliant, and your plan collapses back into probate assessment.
Inviting family disputes: Blended families already navigate landmines around step-kids, exes and new spouses. Without adept guidance tailored to your relationships and values to address sensitivities, you may inadvertently spark bitter feuds that tear relatives apart in court battles over vague directives.
Failing to properly name guardians for minor children: If you have kids under 18, making arrangements for their care should be your top estate-planning priority. Guardians are legally empowered caregivers should anything happen.
Yet merely naming guardians in your will leaves children in jeopardy. If you become incapacitated, minors lack protection and could enter foster care while affairs unwind in court.
Send your questions to ccolan@colanlegal.com and use “Alpine Mountaineer estate planning question” as the subject. We’ll answer your questions in our upcoming issues.
This article is provided by your local estate planning attorney, Corina Colan.
The Law Office of Corina I. Colan / (909) 265-3315 / www.colanlegal.com
0 Comments