4 Common Estate Planning Errors and How to Avoid Them
Some mistakes don’t show up right away. When people make estate planning errors, they may never know what they did. Their loved ones will find out, though. But, there are ways to prevent errors that may cause your family unnecessary grief. It just takes some careful planning and communication.
Lost Assets
Martha did not trust banks. Instead of depositing her money into a checking or savings account, she hid it in her house. After she passed away, her family was able to find $76,000 hidden in the house. They believe that valuable assets including money, insurance benefits, and jewelry are still missing.
Reilly trusted banks. He did deposit his money into bank accounts — lots of bank accounts. Two years after his death, Reilly’s family still feels that they have not found all of his estate assets.
This type of scenario happens, but it doesn’t have to. Communicate with your family. If you’re not comfortable telling your family where your assets are located, make sure your attorney and personal representatives know.
Out-of-Date Beneficiary Designations
Harry outlived most of his family, survived only by two great grandchildren. Unfortunately, Harry had named his spouse as sole beneficiary on his financial accounts and insurance policies. He failed to update his beneficiary designations. Some financial institutions transferred Harry’s assets to his estate. Others distributed the funds according to their own plan documents. Either way, it was a hassle that didn’t have to happen.
Update your beneficiary designations as needed. Any major life event can trigger revisions to your estate plan and to your beneficiary designations.
Failing to Plan for Incapacity
An ER physician told Doug and his family that their Uncle Zeke needed 24/7 nursing care. As they searched for a nursing home, the high cost concerned them. Even worse, Uncle Zeke had not done any estate planning. His savings account was quickly depleted, but he still owned a home and other real property. With no long-term care insurance and no savings, they looked toward Medicaid only to learn that Zeke did not qualify.
It’s important to include incapacity planning in your estate planning. By the time Uncle Zeke became ill, it was too late. He and his attorney could have used strategies like gifting, transferring assets to a trust, or buying long-term care insurance to plan for his possible reliance on public benefits like Medicaid.
Consult with an Experienced Estate Planning Attorney.
At the Law Offices of John Mangan, P.A., we help clients build, develop, and maintain estate plans that adapt to their changing lives, including times of incapacity. Please contact us at 772-324-9050 to schedule an appointment or fill out our Contact Form. We are located in Palm City, Florida, and serve clients in surrounding communities like Stuart, Hobe Sound, Port St. Lucie, and Jupiter.