We sometimes have clients approach us seeking advice with regard to damage control. They are in difficult positions because of the estate planning mistakes that were made by family members that passed away. It is disconcerting to see people dealing with negative circumstances when they could have been completely avoided, and we do the best that we can to help.
However, there is only so much that can be done in many instances. With this in mind, we are going to share some common estate planning mistakes here in an effort to guide people away from them.
DIY Estate Planning
There are websites that sell boilerplate legal documents including estate planning devices like Last Wills. They want you to believe that anyone can simply pay for a download or worksheet and fill in the blanks to properly provide for their loved ones.
If you think about it objectively, estate planning involves arranging for the distribution of everything that you have earned throughout your life to your family members. DIY projects can be great, but you have to know where to draw the line.
Of course, you do not have to take our word for it. Consumer Reports is a long-standing, highly regarded publication that decided to put this subject under the microscope several years ago.
They created Last Wills using templates that they obtained from three of the leading websites that sell boilerplate legal documents. Subsequently, they enlisted three prominent legal professors to examine the wills and share their observations.
Ultimately, these scholars found flaws, and they stated that unintended negative consequences could come about when laypeople try to go it alone with the benefit of these tools. The publication advised against do-it-yourself estate planning unless the circumstances are extremely simple.
Making the Wrong Choices
Far too many people think that a Last Will is the right asset transfer vehicle to use if you are not extremely wealthy. In reality, there are alternatives that can be far superior when certain circumstances exist. There are trusts that can be ideal for people that are not in the financial stratosphere, so you should understand all the facts before you make any final decisions.
Failure to Consider Latter Life Eventualities
In addition to the monetary transfers that are at the core of the estate planning process, it is wise to consider the eventualities that you may face toward the end of your life. Unfortunately, many people do not address them, and the inaction will often yield negative consequences.
About four out of every 10 people that are 85 and older have Alzheimer’s disease, and of course, people with dementia reach a point where they can no longer make sound decisions.
This is not the only cause of incapacity, and it should be noted that your life expectancy is over 80 years once you reach the age of 65. If you do nothing to prepare for possible incapacity, the state could step in to appoint a guardian to act on your behalf if it becomes necessary.
You can take the matter into your own hands through the proper planning. If you have a Revocable Living Trust as an asset transfer device, you could empower a disability trustee to act as the administrator in the event of your incapacity.
A Durable Power of Attorney for Property could be added to name someone to manage other property that you have, and you could add a Durable Power of Attorney for Health Care decision-making. To round it out, you should include a Living Will to state your life support preferences.
With the above in mind, you should also consider possible nursing home expenses. These facilities are very expensive, and Medicare does not cover long-term care. That’s the bad news, but the good news is that you can implement a nursing home asset protection strategy as part of your overall plan.
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Our attorneys can help you create an error free estate plan that is ideal for you and your family. You can give us a call at 513-721-1513 to schedule a consultation, and you can use our contact form is you would like to send us a message.