When we post on this blog, we usually share information about what you should do when you are planning your estate. On this day, we are going to go in a different direction that is just as useful if not more. We are going to look at five common estate planning mistakes that should definitely be avoided.
Let’s face it, passing away is not on anyone’s to-do list. For many, death is a taboo subject, and while it may be understandable, this perspective can yield negative consequences.
If you keep procrastinating when it comes to estate planning, or if you make a conscious decision to let the chips falls as they may, people that you love may pay the price.
The condition of intestacy would exist if you die without any estate planning documents in place. Under these circumstances, the probate court would step in to appoint a personal representative to act as your estate administrator.
Final debts would be paid during the process, and ultimately, the remainder would be distributed according to the intestate succession laws. Under these circumstances, people that you would never intentionally omit may be disinherited.
Immediately Settling for a Last Will
Many people assume that a last will is the right estate planning document for anyone that is not extremely wealthy. In fact, this is not the case at all. There are other options that can be more beneficial for a wide range of individuals. You should discuss them with a licensed estate planning attorney before you make any assumptions.
If you have this conversation, you will inevitably hear about the device called a revocable living trust. With this type of trust, you maintain complete control because you can act as the trustee and the beneficiary while you are alive.
After your passing, the trustee that you choose to succeed you would be empowered to efficiently and effectively distribute assets to the beneficiaries in precise accordance with your wishes. The estate administration process would not be subject to the costly and time consuming process of probate.
You could include a spendthrift clause for asset protection if you choose to do so, and you could instruct the trustee to distribute limited assets over an extended period of time.
Failing to Consider Incapacity
It is not a pleasant thing to think about, but a very significant number of elders become unable to make sound decisions at some point in time. While it is not the only cause of incapacity, Alzheimer’s disease strikes about 40% of elders who are 85 years of age and older.
If you do nothing to prepare for this eventuality, the court could appoint a guardian to act for you, and you would become a ward of the state.
You can be proactive about this possibility and select your own representatives through the execution of legally binding documents called durable powers of attorney.
Harboring Long-Term Care Misconceptions
Most seniors will need long-term care eventually, and many will reside in nursing homes. In our area, you can expect to pay for a yearlong residence in a nursing home. Medicare does not pay for this type of assistance, and your family may absorb two rounds of nursing home costs if you are married.
This is something you should definitely discuss with an attorney when you are crafting your legacy plan.
Never Seeking Legal Counsel
The worst estate planning mistake that can be made is a failure to have a discussion with a legal professional. If you have not done so, now is the time for action. We can be reached by phone at 518-389-6020 in Albany and 802-879-7133 in Vermont.
If you would like to reach out electronically, simply send us a message through our contact form and we will be back in touch with you promptly.