We are sometimes approached by people that are dealing with negative situations that were caused by estate planning mistakes. In this post, we will look at five of these errors that are commonly made so you can take the right steps to steer clear of them.
A survey that was conducted earlier this year found that just 32 percent of American adults have wills or trust in place. You may assume that the majority of older people are properly prepared, but in fact, about 52 percent of people that are 55 years of age and older have no estate planning documents
If you die intestate, the state would be forced to supervise during the administration process. A representative would be empowered to act as the estate administrator, and after debts are paid, the court would order the distribution of the assets.
They would use the intestate succession laws of the state of Ohio. When assets are distributed in this manner, people that you would have never forgotten could be disinherited or shortchanged.
There is no reason to take any chances when qualified estate planning assistance is just a phone call away.
Embracing Myths About Trusts
One very common mistake is the refusal to consider the value of trusts because of certain misconceptions. A lot of people think that trusts are only for very wealthy individuals, but this is simply not true.
There are many different types of trusts, and some of them are quite useful for people of relatively ordinary means. As a layperson, there is no reason why you would be aware of the different options that are available, and this is understandable.
When you discuss your situation with an attorney, you may be surprised to hear about a trust that can provide a solution that is ideal for you and your family.
Outdated Estate Plans
People that have taken action to put estate plans in place often drag their feet when updates are required. The existing estate planning documents are valid until and unless they are replaced, and this is something to take seriously.
If you do not revise your plan and you pass away before you get around to it, the distribution of your assets may not be consistent with your wishes at the time of your passing.
Failure to Address Nursing Home Costs
Approximately 35 percent of seniors will eventually reside in nursing homes. Long-term care costs can potentially consume a significant portion of your legacy, because these facilities are expensive.
Medicare does not pay for the custodial care that nursing homes provide, so this is not the solution. Medicaid will cover custodial care costs, but you have to take intelligent steps to divest yourself of assets at the right time to develop the appropriate financial profile.
Estate Administration Misconceptions
You may assume that the administration of a trust is complicated, and the heirs receive their inheritances right away when a simple will is utilized. In fact, a will would be admitted to probate, and a long and expensive legal process would be initiated.
On the other hand, if you use a living trust, the trustee that you name in the trust declaration would be able to distribute assets to the beneficiaries outside of probate. Probate avoidance is key, and there are other reasons why living trust administration is more streamlined and efficient.
Attend a Free Webinar!
We are conducting some webinars over the coming weeks, and we encourage you to join us for one of these informative sessions. You may have more time on your hands due to the limited social opportunities that we have, so this is a good way to invest some of it wisely.
There is no charge, but we ask that you register in advance so we can reserve your spot. You can see the dates and obtain registration information if you visit our webinar page.