As we discussed last month about Medicaid planning, a lot of misinformation also exists in the area of estate planning. Almost every day, someone will tell us for example that he has heard that if you test a will, "there is no approval". Unfortunately, this type of misinformation is often passed on as a useful advice in estate planning. Customers often learn the hard way that relying on such advice can cost them thousands of dollars. In an effort to help educate and prevent others from making these all-too-common mistakes, we have kept our list of top 10 estate planning mistakes.
Most people are at least aware that it is important to have an estate plan. Far too often, however, they procrastinate. Do not let this happen to you.
2. Do not have a will.
The majority of people do not even have basic willpower. A will is essential to who will be responsible for administering your estate and to whom it will be distributed after your death.
3. Do not have a power of attorney.
Planning for death is only part of estate planning. In addition to the will, it is extremely important to have a durable power of attorney for your finances and a power of attorney for health care for medical decisions.
4. If you do not recognize your will, you will not avoid probate.
Assets in the name of a deceased will not be able to avoid probate, even if there is a will.
5. Failing to consider a trust.
Too many people mistakenly believe that a trust is reserved for the rich. They also do not understand how costly and time-consuming it can be. A trust often saves time and money for your family if you become disabled or die.
6. Not to properly fund a trust.
For people who decide that a trust suits them, the mere signing of the trust is only part of the process of creating a trust. Assets such as a house or other real estate, bank accounts, stocks, bonds, etc., must be renamed in the name of the trust in order to avoid the homologation.
7. Do it yourself.
Although everyone loves to save money, the old saying that "you get what you paid for" is especially true when it comes to estate planning. If your estate and loved ones are important to you, it is strongly recommended that you do not attempt to plan your estate yourself.
8. Adding children&39;s names to assets.
Adding names of children to bank accounts, real estate or other assets is often the surest way to create problems after your death.
9. Incorrectly name the beneficiaries.
A good estate plan should also consider assets that have a beneficiary, such as life insurance, annuity, IRA or 401K. Failure to properly name the primary and secondary beneficiaries will even undermine a well-written will or trust.
10. By failing to periodically review your estate plan.
A will or trust written years ago may not be appropriate today. When circumstances or laws change, it is recommended that your plan be reviewed by a former lawyer.