5 Most Common Mistakes to Avoid During Estate Planning
1. Lack of an Estate Plan
You may or may not have estate planning documents in place. But those closest to you can manage your final affairs. Your surviving spouse and minor children will be shocked and grief-stricken. Business partners may feel confused. From their perspective, the most serious and commonest estate planning mistake is not having an estate plan at all. Due to the unprecedented chaos following the demise of a loved one, having a legitimate will or trust in place secures those you care about with proper guidance to manage your affairs. Presently when there’s so much uncertainty everywhere, only an estate plan prepared in consultation with the best lawyer in California can bring you peace of mind.
2. Failure to Regularly Update Your Estate Plan
It’s been observed that a lot of families prepare a will and appoint a guardian when their first child is born. Life changes with the birth of more children. Parents purchase a home. Someone ventures into a business. Grandparents expire. There could be a divorce. Then does that original will would still be applicable as you intended?
Your living will indeed authorize your spouse to make end-of-life medical decisions on your behalf. But if you're divorced, then do you still want your ex-spouse to make your health care decisions? Probably you'll have to change your beneficiary designations as you've included children or stepchildren in your family. You possibly wish to name contingent beneficiaries if some heirs aren’t living anywhere or cannot be found once your will is executed. So, it’s recommended to periodically review and update your will, trust, living will, and life insurance policies to reflect present circumstances and new life events.
3. Lack of Planning for Disability
When surveyed, most workers believe their disability risk before retirement is 1-2% only. But the ground reality is more shocking as the Society of Actuaries has found that one in seven workers will be handicapped for five years or more sometime before attaining their retirement age. Maximum U.S citizens aren’t prepared for an unexpected disability and its impacts. However, this is an issue for which only a comprehensive estate plan can be beneficial. Consult an estate planning lawyer about a revocable trust aka a living trust.
Entrust a reliable person with a durable power of attorney to decide on your behalf if you can’t do so for yourself. The durable power of attorney empowers someone with lasting authority to decide. You can also assign a temporary power of attorney for the time of your incapacity.
4. No Pre-planning for Nursing Home Care
Retirement plans must include nursing home planning. A lot of people needing nursing home care will end up utilizing Medicare funding. However, they can only do so once they have consumed all their financial resources to create a financial challenge for the surviving spouse. Pre-planning for nursing home care can guide financial decision-making for many years. Pre-planning can secure the spouse to some extent while ensuring the medically needy spouse is eligible for Medicare funds. Special needs trust is an effective tool for this purpose.
5. Putting Your Child’s Name on the Deed to Your Home
Often people put an adult child's name on the deed to their home to protect their home from creditors, hoping that this is the safest way to transfer property. However, this strategy may backfire. If you put your child's name on the deed, you are providing them with the title to your home. They can record the deed with the proper municipal authority and can then throw you out of your home or can sell the home. You’ll lose control of your assets.
Inference
Try to avoid all the steps mentioned in this article. Else you might end up dealing with a Los Angeles Criminal Defense Attorney to get your name cleared from any controversy.
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