If you’re like most people, you have the best of intentions with regard to how you want your estate distributed when you die or your affairs handled should you become incapacitated. Unfortunately, without proper planning, your best intentions may not be enough. In the last article, we discussed two common estate planning mistakes: Failing to Plan and Doing it Yourself. Here are the third and fourth most common estate planning problems we see:
- Not planning for disability. A properly drafted estate plan not only specifies what will happen to your assets when you die; it also plans for what happens if you become incapacitated. It is important to have documents, such as a power of attorney and patient advocate designation, that appoint someone you trust to act on your behalf if you can’t act for yourself.
Importantly, a strong Power of Attorney, drafted by an attorney well-versed in Elder Law, can assist in the protection and preservation of assets should you or a spouse enter a nursing home or other long term care facility.
- Failing to fund a trust. Once you draft an estate plan, you aren’t done. If your estate plan includes a trust, you need to actually fund the trust — by retitling assets in the name of the trust — or the trust will be useless.
You may have been approached by a door-to-door salesman or have been invited to a “free meal” seminar about estate planning. Often times, clients are sold a “trust” for thousands of dollars. The person you meet with is often not an attorney but will hire an attorney hundreds of miles away to draft your trust. You will get a fancy binder with a trust, but little or no assistance in actually funding your trust. The trust is useless unless it is properly funded. Unfortunately, I see clients every week who have been spent thousands of dollars on these so-called trusts, with nothing to show for it.
In the next article, we will discuss the last two common mistakes: Not Checking your Beneficiary Designations and Not Reviewing the Plan.
To ensure that you’re not making these and other common estate planning mistakes, give us a call today for an office or home-visit.