All too often, new clients come in, and we discover that they have been complacent about the need for proper estate planning. They think they are either too young or too old, they are of modest means, or an estate plan is unnecessary. Plus, no matter how much you think your family loves one another, people are greedy when it comes to money. When assets come into play, no estate plan, or a poor one, can cause issues or allow property to fall into the wrong hands.
Here are 10 mistakes that, if avoided, will smoothly transfer your estate.
- Not having a Will or, in the alternative, a living trust – Without a main vehicle to drive the estate, the probate court has to get more involved.
- Focusing solely on taxes – Under current tax law, most people will not hit the estate tax limits, so taxes do not have to be the driving decision maker.
- Naming the wrong executor/agent/trustee – Determining someone responsible enough to fill these roles can be the hardest job in the process, but the executor will have to deal with complaining family members, so don’t select a push over.
- Making things difficult for the executor by misplacing key papers – Confirm the executor knows exactly where to find everything (Will, asset information, passwords, etc.).
- Failing to update beneficiary designations – Sometimes beneficiaries die before you, so it’s good to name a backup beneficiary or update to new beneficiaries if this happens.
- Being secretive about your assets – Not telling family or the executor what you have could result in unclaimed assets that will eventually go to the state. They don’t have to know all the assets right now, but keeping a general, updated list gives them a good place to start.
- Using joint ownership arrangements incorrectly – Having joint ownership with someone other than your spouse can sometimes cause problems.
- Keeping outdated or inadequate documents – Life and the law changes, and documents drafted 20 years ago probably need to be updated.
- Misunderstanding asset values – Don’t assume that all assets will grow equally.
- Not coordinating with your advisors – CPAs, CFPs, and lawyers should all be consulted to make sure your situation is correct.
Fix these mistakes and your estate will protect family privacy from probate disputes, distribute property to heirs quicker, and avoid the need for minors to have representatives appointed to protect their interests. Planning your estate could be the best SmartMoneyMove of your entire financial plan.
Beth Gilchrist, Esq., Managing Director of Trusts & Estates, Norris Legal Atlanta Law Group, LLC
Beth is a Georgia native. She has a Bachelor of Arts in English from the University of Georgia and a J.D. from the Walter F. Georgia School of Law at Mercer University. Beth’s practice focuses on helping families design comprehensive estate plans that provide customized protection and strategies for generational planning. She joined Atlanta Law Group in 2018 and simultaneously serves as an Editor of the Atlanta Lawyer Magazine.
Any legal information in this article is not intended as legal advice. It is for educational use only. In addition, since the law can vary by state, some of this information may not be applicable to you.