Top 10 Estate Planning Mistakes

We’ve all heard at least one estate planning horror story.  Or we’ve seen one on TV.  The surprise mistress that is given a large cut, the one child that has been written out of a will or feuding family factions each producing a different copy of the will.  It all makes for great TV and great drama, but chances are, you aren’t leaving your estate to a secret lover and you don’t want your estate plan to create a lot of undue stress.  But despite your best intentions, there are mistakes you could be making – unknowingly – that could produce a lot of drama after you’re gone. I’ve compiled ten common mistakes I see folks make:

  1. Having No Estate Plan At All: When you pass on without an estate plan of your own, you’re subjecting your assets to Uncle Sam’s plan. Do you really want the government to be the arbiter of your estate?
  2. Having An Outdated Will: If you want to ensure the assets you’re leaving behind are given to those you intend, you’ll want to perform a periodic update to your will every three to five years to make sure you properly account for all the births, deaths, divorces and new property acquisitions that may have occurred. It’s important to get into a habit of reviewing regularly.
  3. Procrastinating: Most folks realize the importance of an up-to-date estate plan, but don’t see the need for one until there’s an unexpected death or onset of a disability (i.e. until it’s too late to create one).  The best time to make an estate plan is ten years ago.  The next best time is right now.
  4. Not Planning For Disability: Death is not the only reason to have an estate plan, as your decision-making abilities can be sapped by a long term disability.  Deciding who will handle your financial and healthcare decisions now is important in case you lose that ability in the future. The last thing you want is a court appointing a guardian on your behalf, because you have no choice in who that is (and it costs a lot of money too!).

    We see it far too often – a couple keeps putting off making an estate plan until one day one day he falls, is diagnosed with Alzheimer’s and needs to go into long term care because he’s no longer mobile.  They are now in need of the protections offered by a comprehensive estate plan but can’t make one because he no longer has capacity.  They waited too late.

  5. Failing To Gift, or Gift Properly: Gifting is a great estate planning tool if used correctly. Strategically gifting can reduce the size of your estate for tax purposes, help you with long-term care planning and more. However, gifting without professional assistance can cause unintended consequences, major problems and headaches.
  6. Putting A Child On Your Deed: Yes, putting a child’s name on the deed avoids probate, but it also leaves the child with a hefty taxable asset, and could leave you homeless should that child go through a divorce, get hit with a creditor claim or a lawsuit.
  7. Choosing The Wrong Person As Executor:  You may want a spouse or a child to serve as estate Executor, but the duties required of the Executor coupled with the sense of loss they will feel can quickly overwhelm them.  The most important element in choosing an Executor is trustworthiness. You must trust the person you select 100%. You must also have at least two backup Executors just in case the primary cannot service.
  8. Failing To Utilize Trusts: There is a pervasive negative idea of a trust – that it’s a large, overly complex legal document that puts other people in control of a person’s assets.  In actuality, many modern trusts are slim, plain language protective devices that ensure your wishes are protected and your legacy is secured for multiple generations.
  9. Not Working With A Professional: We’re a nation of do-it-yourselfers.  The abundance of Lowe’s and Home Depots are testament to that.  It may be appealing to head to Staples and buy a fill-in-the-blank will. But often times, these DIY documents miss key elements that are unique to your family. An experienced estate planning attorney may cost more, but you’re not paying for the documents—rather, you’re paying for the consultation with a professional who has experience, and paying for peace of mind.
  10. Deathbed Wills: We continue to hear about folks who try to do last-minute (and we mean last-minute) planning. It never works out. You are not in the right frame of mind and you may be unduly influenced. Worse, your last-minute planning could cause protracted legal battles and be a stain on your legacy. You never know when the time will come, so the best time to plan is today and continue to revise the plan over the years. 

So if you’re worried that you may be making some of these mistakes, it’s worth talking to us, if only for the peace of mind you’ll get to know that you’re actually OK.  And if there are changes to be made, we can work hand in hand with you to see that they’re done to your specifications.  If you have any estate planning concerns, you owe it to yourself to call us.  Give us a ring at 215-706-0200 to set up a time to talk.  You’ll be glad you did!