Here are 5 Common Estate Planning Mistakes you want to AVOID:
You don’t have an estate plan: If you own assets exceeding $150,000 (thats owning one house!), a will is not going to protect your assets or the loved ones you leave behind. Not creating an estate plan means you are leaving your family with a lot more work after you’re gone. This means that you not only have no say in how your assets get distributed, but you will also be leaving your family with a large expense. Probate fees are statutorily set and could exceed $12,000.
Not funding the trust: So, you have an estate plan?! Great news! Did you transfer everything to the trust ? This step is important. If you never transfer your assets into the trust name, well, the trust never gets funded and is basically no use. An experienced estate planning attorney can help your family if the attorney has the proper tricks and tools, but it’s going to cost the beneficiaries an additional $3,000-$4,000 to “fix it”.
The wrong guardian is listed for your children: By having a will, you can name a guardian for your minor child. However, if its been a while since you’ve reviewed the guardian selected, make sure that guardian is still valid. For example if you want your child to stay in the state and close to family members, but the guardian listed in your will was recently transferred to a job in Dubai, well maybe its time to update that will. If you don’t have a will, the state decides who will care for them at a hearing. Sometimes the judge will consider the child’s preference (if they are old enough) and use that to make a decision.
You have the wrong beneficiary listed for your 401k or life insurance: You named your mom as the beneficiary of your 401k or life insurance policy. Now you want your daughter to be the beneficiary. If you don’t update it, your mom will be the recipient. Its a quick and easy fix- just contact the company holding your policy and request the make a change in the beneficiary.
Not using a qualified attorney: Although there are lots of online or DIY estate planning tools, estate planning is not something that should be attempted without consulting an attorney. A simple mistake or omission can have a huge impact long after you are gone. A local, experienced estate planning attorney understands the terms and legal requirements in your state. Most have counseled many families and have seen the results of proper and improper planning. An experienced estate planning attorney can advise you on important issues such as whether or not a special needs trust need to be created for a parent or a child who has creditors after them.
If you need help with estate planning, please contact our Redwood City Estate Planning Attorney. We will be more than happy to help you create the plan that best suits your needs or update the one you currently have.