Avoid these five estate planning problems to maximize the benefit of the plan for yourself and your family.
1. Split planning.
Sometimes people try to “hedge” their planning among multiple service providers. An estate plan cannot take into account assets which are not disclosed, however, and may result in foregoing certain strategies and benefits that could have been planned for. Failing to pursue a comprehensive plan that takes all assets into account can result in some undesirable tax, asset protection, or other consequences.
2. Incomplete planning.
Omitting critical documents can potentially leave you or a family member out in the cold in an hour of need. That could mean having to put up with needless delays and costs, or worse, it can potentially lead to lapses in care and protracted disagreements within the family. Comprehensive planning is an investment that can pay dividends in the stability and harmony of a family.
3. Not executing the plan correctly.
If the plan documents are later found not to have been executed properly. That means they will be given no effect, and you will be treated as having never done them at all.
4. Not funding a trust.
When created, a trust is like an empty box. It only holds that which is actually put inside. If assets are not transferred into the trust, they will not enjoy the protections and administration of the trust, and any trust planning related to them will be for naught. Therefore, it is important to properly transfer real estate and retitle accounts to reflect the change.
5. Not following up.
As time goes by, things change. Real estate gets bought or sold, accounts move up or down in value, families increase or decrease in size, and even legal and technological conditions change. Estate planning is not meant to be done once and forgotten; rather, it should be updated for any life changes and revisited to stay on track with long-term and lifetime goals.