6 Biggest Estate Planning Mistakes

Estate planning is planning for your own incapacity or death and how you want things handled when the time comes (because it will come – nobody lives forever!).  These are the 6 biggest estate planning mistakes that I have seen in the last 20 years of practice:

1.Thinking estate planning is for the wealthy.  How many times do I hear, “I don’t really have anything – just a bank account and a house.  I am not rich so I really don’t need to do any planning.”  Wrong.  Everyone, and I mean, everyone 18 years of age and older needs to have basic documents in place – that is an estate plan.  I don’t know how many times I remind people of Terri Schaivo – but she is the perfect example of why everyone needs to have the basic documents in place – a Will, Durable Power of Attorney, Living Will and Health Care Surrogate Designation.  If Terri had had a Durable Power of Attorney, Living Will and Health Care surrogate designation in place, you very likely would have never heard of her because these documents would have given her husband (or whomever she wanted to act in her place) the authority to make financial and health care decisions for her without having had to go through the guardianship process and litigation.  If you have someone you want to make sure does not get anything, if you don’t like the way the state of Florida has laid out who gets what if you do not have a Will, or if you simply want to control things from the grave, then you need an estate plan.

2.Failing to plan.  Some people choose to stick their heads in the sand and think that everything will take care of itself in the end.  I think that is a very selfish way to lead your life because you are putting a lot of worry and responsibility on your family if something happens to you (I’m talking about before you die) and putting them in the position of having to go to court to ask the court to declare you incapacitated and appoint a guardian to make financial and health care decisions for you.  Do you really want a court making that decision for you?  If you want to save your family the hassle and money of probate or guardianship, then you need an estate plan.

3.Improper planning.    I get it – you do not like attorneys, so you take it upon yourself to do planning – you put your kid (or kids) on title to your real estate, or you make outright gifts of property to them, or you leave it all to one child with instructions to divvy it up between all the kids at death (yeah, that always works out the way it was planned).  Please, do your family a favor and find a qualified estate planning or elder law attorney who can give you good advice and help you to have some peace of mind because you planned properly.  If you want to save your family from fighting about who gets what after your death, then you need an estate plan.

4.Doing it yourself.  This kind of goes along with improper planning because 9 times out of 10, the person who does it themselves, usually does it wrong.  Documents must be signed in certain ways depending in which state you reside.  For instance, in Florida a Durable Power of Attorney must have two witnesses and a notary, while in Ohio, a Durable Power of Attorney must only be signed in front of a notary.  And you may not realize the implications that leaving assets to certain individuals can have (like leaving a $150,000 life insurance policy to a minor child or leaving assets to an adult child that has special needs and receives government benefits) which could be a very expensive mistake (meaning you’ll need an attorney one way or another – either before death or after death).  If you think doing it yourself will solve all of your problems, then you need an estate planning attorney.

5.Failing to listen to your attorney (and following through on things like funding a trust).  So you do actually go to the attorney and have all the documents done that you need, but you do not do your “homework”.  I always give my clients homework – either they need to update their beneficiary designations, or change the title on the accounts and transfer their assets into their trust.  I try my best to follow up with clients and make sure they follow my instructions but, in the end, it is up to the client to handle their own affairs (I can only do so much).  So, if you are going to pay an attorney to do the work, listen to your attorney and follow their instructions.

6.Keeping your plan up to date.  Keeping your plan up to date is relatively easy to do, but many times, we have the documents done and stick them in a drawer and forget about them.  I usually advise clients to have their documents updated (or at least reviewed) every three to five years, or if they have a major life event (such as death, divorce, birth, etc.).  If someone you have appointed to be the personal representative of your estate passes away, it may be time to review your documents and have them updated.  If your children are now adults, and the last time your documents were done was when they were minor children, it may be time to review your documents with your estate planning attorney.

If you have other questions about estate planning documents, please call Board Certified Elder law attorney, Laurie E. Ohall, to set up a free 15 minute phone consultation. Contact Ms. Ohall today if you need estate planningelder lawprobate or guardianship assistance.