Common Estate Planning Mistakes

A recent study in the United States discovered that far less than half of all Americans have a written estate plan. Sadder still is the fact that most of those written estate plans won’t accomplish what the client intended. There are three mistakes common to poorly written estate plans. If you already have or are now putting together an estate plan, please take steps to avoid the following pitfalls.

The first error, frequently made, is failing to focus on how the assets you leave will affect your heirs. Can you be sure you would approve of the way yours heirs will handle your inheritance? If you’re not, the time to prevent disasters from happening is now, while you are still alive. Once you’re gone, it’s too late.

Another mistake is failing to plan for your own incapacity. Where will you live if you become disabled? Who will take care of you? Who will pay the bills? Can you regain control of your estate should you be returned to full capacity? You can help prevent confusion by writing your instructions and appointing fiduciaries to implement those instructions at the appropriate time.

A third, very common mistake is assuming that all is well because you have a will or have everything owned jointly. In both cases, you are unwittingly giving control to a probate judge. A will guarantees probate. Joint ownership may avoid probate at the first death, but may unduly complicate the estate at the second death. For example, what about a remarriage where all of the assets go to your new spouse and then to his or her children, with none going to your biological children?

All of these problems are easily avoided with a properly crafted estate plan. Call Idaho Estate Planning at 208-939-7658 and let’s work together to design an estate plan that does exactly what you want.

IDAHO ESTATE PLANNING – THE LEGACY EXPERTS
We are your best source for legacy planning and the only source for the Life Plan™ in Idaho.
Estate Planning – Living Wills – Advance Directives – Veterans Planning – Medicare Planning

LEAVE A LEGACY OF VALUES NOT JUST VALUABLES

PASSING ON VALUES NOT JUST VALUABLES
Often the first thing people think of in estate planning is “How do I handle my stuff?” The question then goes to who’s going to handle it, when and how? We find ourselves at the beginning of an unprecedented transfer of wealth from one generation to the next (the “baby boomers”). Despite this tremendous transfer of wealth, a 2005 survey commissioned by Allianz Life Insurance Company and the consulting firm, Age Wave*, found that the non-financial aspects of leaving a legacy are 10 times more important to parents and their children than the financial aspects. However, while estate planners seem to be addressing the financial or tax aspect of this transfer, estate planners are not doing a good job of addressing and handling these family values and traditions, memories and stories, and personal possessions with emotional value.

THE GENERATION GAP
This survey also showed that family conflicts often arise over the fulfillment of last wishes, selection of personal representatives, or distribution of sentimental personal possessions. In fact, distribution of personal possessions was five times more likely to cause family conflicts than the amounts and distribution of money. Thus, efforts by parents to carefully protect and distribute cash assets, were often overshadowed by the failure to appropriately consider and handle family relationships or traditions or personal possessions.

LEAVING MORE THAN JUST “STUFF”
There are numerous ways families can convey values, family histories, and non-financial legacies and ensure a smooth transition to the next generation.

• First, think about leaving a legacy, rather than just a division of your “stuff”.
• Second, write your history. Help your children and grandchildren better understand who they are by helping them to remember who you are.
• Third, hold meetings with your children and advisors before a crisis arises to ensure that everyone understands your wishes. This will reduce the potential for later misunderstandings.
• Fourth, teach and train your successor trustees and personal representatives to help them perform their duties effectively. The more they know, the better they can carry out these responsibilities and avoid contention within the family.
• Finally, explain to your advisors – your attorney, financial advisor, insurance agent, etc. – that you intend to leave more than “stuff” to your children and their children. Seek their help in leaving a legacy.

IDAHO ESTATE PLANNING – THE LEGACY EXPERTS
We are your best source for legacy planning and the only source for the Life Plan™ in Idaho.
Estate Planning – Living Wills – Advance Directives – Veterans Planning – Medicare Planning

*Full article found here: https://www.allianzlife.com/MediaCenter/PressLegacies.aspx