Using a Traditional Estate Plan for a Blended Family Your estate plan needs to be suitable for your family. Yet, as reflected in state intestacy laws, “default” estate planning has a clear bias towards traditional families. For example, estate plans for married couples, especially online “do-it-yourself-kits” often follow the “all to spouse” model at the death of first spouse. However, as…
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#19 of 25 Estate Planning Mistakes – Children on Deeds
Putting Child’s name on Deed A common estate planning method, and a potentially costly mistake, is adding your children to the deed on your home as co-owners with rights of survivorship. While this step will avoid probate, it also has adverse tax consequences. Since your children received part of the home’s value as a gift, they will owe more…
#18 of 25 Estate Planning Mistakes – End of Life
Failing to Plan for End-of-Life Issues End of Life Planning is needed so that you retain control of your person. One of the fears shared by many people is a slow death with their life being artificially and mechanically prolonged following an accident or other medical issue. You can avoid this fate with proper planning. The default treatment for medical…
#17 of 25 Estate Planning Mistakes Long Term Care
Failing to Plan for Long Term Care As people live longer, the number of people who spend some time in a nursing home continues to increase. With costs nearing $100,00 per year, a nursing home stay can destroy your estate and financial plan. Yet many people fail to plan for this increasingly likely event. The result is that you…
#16 of 25 Common Estate Planning Mistakes – Irrevocable
Failing to Consider Using an Irrevocable Trust Revocable living trusts are designed to avoid probate. They can also eliminate the need to have a guardian appointed if you become incapacitated. They do not, however, protect assets from creditors or shield them from the Medicaid spend down process. Irrevocable trusts, however, if properly drafted and funded, can do both. If either of those…
#15 of 25 Common Estate Planning Mistakes – Pets
Forgetting About Man’s Best Friend Your estate plan can include provisions for your pet. Sadly, many pets end up living out their lives in shelters after their owner’s death because no plan was in place. You can plan for your pet by designating someone who will have custody and providing them with financial support to pay for the pet’s food…
#14 of 25 Common Estate Planning Mistakes – Life Events
Not Updating Your Estate Plan to Reflect Life Events Estate planning is impacted by life events (divorce, marriage, death of family member, birth of family member, substantial change in health, diagnosis of serious illness, change in financial circumstances) and needs to be revised accordingly. After a life event, you need to review your estate plan, including your trust agreement, to…
#13 of 25 Common Estate Planning Mistakes – Plan Reviews
Not Conducting Periodic Reviews of Your Estate Plan Estate planning is not a static process. You cannot place your estate plan on a shelf and expect everything to work out. Estate plans require maintenance. Every 18- 24 months you need to review your estate plan’s legal documents and the beneficiary designations on your financial accounts…
#12 of 25 Common Estate Planning Mistakes – Designations
Failing to Update Beneficiary Designations Retirement accounts, life insurance and annuities all avoid probate with a designated beneficiary for each account. These beneficiary designations will override any contrary instructions in a will or trust. These accounts can represent a substantial portion of an estate and need to be coordinated with other aspects of your estate…
#11 of 25 Common Estate Planning Mistakes – Digital Assets
Neglecting Your Digital Assets Increasingly, people are living more and more of their lives in the virtual / digital / online world. However, many estate plans fail to include directions regarding these digital assets. Many bank accounts, social media and email accounts are assets with financial or sentimental value which can only be accessed online.…