The 10 Biggest Estate Planning Sins

Estate Planning

Today’s blog is from a guest blogger, Christopher Berry Esq.

Setting up an estate can be rewarding work, but it also can be quite confusing. Even experts in estate planning or estate law can make mistakes with their own estates. It is always advised to make sure you have a professional estate attorney or financial planner by your side who understands the details of an estate so that your assets are protected from as many “devils” as possible.

And no, the “devils” aren’t just IRS agents. So when you sit down to begin the process of setting up an estate, make sure you don’t commit these 10 “sins” of estate planning:

  1. No Will, No Way –If you don’t have a will, there is no way you can ensure your estate goes to the right people and undesirables are avoided. Your estate is left to the Probate Court. While setting up a will and estate may seem expensive, it’s a drop in the bucket compared to time and expense your family goes through in probate.
  2. “I Love You” – Really? An “I Love You” will is one where the entire estate is left to the surviving spouse. But what next when the spouse dies? As in investing, it’s about diversification. Unless the surviving spouse is much younger, leaving everything to the spouse may just kick the can down the road and burden the spouse with issues that he or she may not be prepared to handle.
  3. To Kids- If They Act Like Kids? While you may diversify from the “I Love You” will, do you honestly think all your kids are mature enough to handle their part of the inheritance? You want your estate to be a blessing, not a curse – so be very honest about your kids’ behaviors and cautious about splitting your estate.
  4. Sharing is Good – Until You Die. Having both names on a piece of property has its benefits, but only if you’re alive and kicking. Joint property can have hidden issues when it comes to setting up an estate for distribution after one or both partners die.
  5. Trust Me! It’s possible that people do not set up a trust within their estate because of poor education, or whether they think it’s only for minor children. But trusts, no matter which type, has privacy and cost benefits that would make it a “sin” to not have a trust somewhere.
  6. Not Trust Worthy? It is one thing to have a trust in your estate; it’s another thing to actually put assets inside. An empty trust does no good.
  7. A Static Document. Life is always changing, so it would be a big mistake to get your estate and documents created and never pull them out again. Maybe you divorce, or a spouse dies, or a child dies, or you get additional grandchildren, or your trustee or executor can’t do the job. Review and update your estate plan every couple of years so it reflects the latest changes in your life.
  8. Immortality. Everyone dies, we know. But what if you don’t die as quickly as you expect, and instead you end up in a nursing home or in hospice care? Is long-term care covered in your estate? If not, your estate could get swallowed up by the costs of staying alive.
  9. Just Living Trust. A Living Trust is tempting. But like an “I Love You” will, you really should not put all your asset eggs in that one basket. There are too many things that could go wrong if you think you only need a Living Trust.
  10. No IRS, No Problem. Contrary to what you might be told, the IRS is not your biggest problem. The biggest enemy is procrastinating and not facing the reality of death and leaving an estate. Conquering that enemy is bigger than any tax man.

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About Christopher Berry

Christopher J. Berry, Esq. is a certified elder law attorney, a native of Southeast Michigan, and the founder of The Elder Care Firm. Chris is a featured guest blogger for Wealth Counsel, and National Financial Planning Association, and a sought-after speaker, and the writer of “Caregiver’s Legal Guide to Planning for a Loved One with Chronic Illness” and other range of Elder Law Topics.

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