St George Estate Planning

Not All Estate Plans are Created Equal

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube

 

Office:   (435) 688-9117
  • Home
  • My Story
  • Learning Center
  • Video Library
  • Fee Schedule
  • Contact Us
  • Internet Estate Plan
  • My Blog
    • Estate Planning
    • Guardianship
    • Values Based Estate Planning

June 10, 2020 By sunrise

FIVE COMMON ESTATE PLANNING MISTAKES TO AVOID

From time to time, it’s good to review why having a complete, up-to-date estate plan is so important. In addition to confirming our own actions, it can provide us with valuable information to pass along to friends and family who, for whatever reason, have yet to act. So, here are five common estate planning mistakes to avoid.

  1. Not having a plan. Every state has laws for distributing the property of someone who dies without an estate plan—but not very many people would be pleased with the results. State laws vary, but generally, they leave a percentage of the deceased’s assets to family members. (Nonfamily members, like an unmarried partner, will not receive any assets.) It is common for the surviving spouse and children to each receive a share, which often means the surviving spouse will not have enough money to live on. If the children are minors, the court will control their inheritances until they reach legal age (usually 18), at which time they will receive the full amount. (Most parents prefer their children inherit later when they are more mature.)
  2. Not naming a guardian for minor children. A guardian for minor children can only be named through a will. If the parents have not done this, and both die before the children reach legal age, the court will have to name someone to raise them without knowing whom the parents would have chosen.
  3. Relying on joint ownership. Many older people add an adult child to the title of their assets (especially their home), often to avoid probate. But this can create all kinds of problems. When you add a co-owner, you lose control. Jointly-owned assets are now exposed to the co-owner’s creditors, divorce proceedings, and possible misuse of the assets, and the co-owner must agree to all business transactions. There could be gift and/or income tax issues. And if you have more than one child but only name one to be co-owner with you, fluctuating values could cause your children to receive unbalanced/unintended inheritances.
  4. Not planning for incapacity. If someone cannot conduct business due to mental or physical incapacity, only a court appointee can sign for this person—even if a valid will exists. (A will only goes into effect after death.) The court usually stays involved until the person recovers or dies and the court, not the family, will control how their assets are used to provide for their care. The process is public and can become expensive, embarrassing, time-consuming, and difficult to end. Giving someone power of attorney as a way to avoid the court process can be risky because that person can do anything they want with your assets with no real restrictions. For this reason, a living trust is often preferred for incapacity planning. With a trust, the person(s) you choose to act for you can do so without court interference, yet they are held to a higher standard as a trustee; if they misuse their power, they can be held accountable. Someone also needs to be given the power to make health care decisions for you (including life and death decisions) if you are unable to make them for yourself. Without a designated health care agent, you could be kept alive by artificial means for an indefinite period of time. (Remember Terri Schiavo? Terri’s story and information about the Terri Schiavo Foundation can be found at http://www.terrisfight.org/, ) The exorbitant costs of long term care, most of which are not covered by health insurance or Medicare, must also be part of incapacity planning. Consider long term care insurance to protect your assets.
  5. Not keeping your plan up to date. Every estate plan is based on the personal, family and financial situations, and tax laws, in effect at the time it was created. All of these will change over time, and your plan needs to change with them. It’s a good idea to review your plan every couple of years or so and make sure it still does what you want it to do. Your attorney will let you know when a tax law change might affect your plan, but you need to let your attorney know about other changes that could affect it.

*Article taken from the Advisors Forum website, http://advisorsforum.com

Filed Under: Estate Planning Tagged With: Estate Planning, Mistakes, Prevention

Teaching from Experience

Get a Complimentary Estate Planning Strategy Session - YES, It's FREE! Click Here for Details and Sign Up Today!
E. Lawrence Brock
Rated by Super Lawyers


loading ...

Selected in 2021 & 2022 by Thomson Reuters

St.

St George Estate Planning
E. Lawrence Brock, Attorney & Counselor

Address: 193 S 100 East, St George, UT 84770
Hours: Monday thru Friday - 9AM–4:30PM
Saturday & Sunday - Closed
Phone: (435) 688-9117

Download a FREE copy of my eBook in Adobe PDF format
Download

Most Recent Posts

In Blended Families, Estate Planning Can have Unintended Issues

December 18, 2021Larry Brock

Good estate planning must consider more than what you want to happen to your property and for your beneficiaries. It also must consider what you … [Read More...]

The Great Resignation: What It Means for Attorneys

November 21, 2021Larry Brock

Millions of Americans have walked away from their jobs this year. This mass employment exodus is noticeable, as is evidenced every day by … [Read More...]

Visit My Blog Posts Page

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube

SERVING: St. George, Brookside, Central, Dammron Valley, Diamond Valley, Gunlock, Ivins, Pine Valley, Santa Clara, Veyo, Washington, Leeds, Pintura, Hildale, Apple Valley, Rockville, Springdale, Toquerville, Virgin, Enterprise, Cedar City, New Harmony, Southern Utah


Copyright© 2017–2023 · All Rights Reserved · St. George Estate Planning

193 S 100 East · St. George · Utah · 84770 - Phone: (435) 688-9117