In far too many cases, loved ones are left behind to deal with difficult circumstances because of estate planning mistakes that were made by family members. With this in mind, we will look at some common estate planning mistakes in this post so you can steer clear of these scenarios.
DIY Estate Planning
There are websites on the Internet that sell boilerplate, fill in the blanks legal documents. The marketing approach revolves around the idea that anyone can play the role of an attorney and establish a do-it-yourself estate plan.
Since so many people are unprepared, this can sound like a simple way to resolve a matter that they know they should address. The sentiment is understandable, but there really are no easy answers.
When you plan your estate, you are taking a profound step, and there is a lot at stake. DIY projects can be fun and economical under some circumstances, but you have to know where to draw the line.
Professional guidance is highly recommended when you want to put an estate plan in place, and this was confirmed by Consumer Reports when they conducted a study a number of years ago.
Don’t Make Assumptions
One of the reasons why a lot of people decide to take matters into their own hands is because they make uninformed assumptions. A widely held misconception is the idea that estate planning consists of a last will, and that’s the long and short of it. Trusts are only useful for very wealthy people, or so the story goes.
In reality, a revocable living trust is an estate planning device that can be a better choice for a number of different reasons. There are other trusts that can satisfy certain pointed objectives, and you do not have to be very wealthy to have these concerns.
We are not going to get into every type of situation that can call for the utilization of some type of trust here. However, suffice to say that there are many tools in the estate planning tool kit, and what is right for one person may not be appropriate for the next.
Plus, postmortem monetary transfers are just part of the equation. When you are planning your estate, you should also consider end-of-life eventualities. If you do nothing to empower representatives to act on your behalf if it becomes necessary, a conservator could be appointed by the court.
The wise course of action would be to discuss your unique situation with a licensed estate planning attorney so can devise a custom crafted estate plan that is ideal for you and your family.
Failure to Consider Long-Term Care Costs
One enormous mistake that people sometimes make is a failure to account for possible long-term care expenses.
Most senior citizens will need help with their activities of daily living eventually. According to the United States Department of Health and Human Services, 35% of elders will ultimately reside in nursing homes.
Nursing homes are extremely expensive, and Medicare does not assist with custodial care costs. If you had to pay out-of-pocket, your legacy could potentially be absorbed by a nursing facility. The challenge is compounded for married couples who may incur two different rounds of nursing home costs.
Medi-Cal is another government health insurance program that does pay for long-term care. Since it is need-based, it takes careful planning to become eligible without losing anything in the process.
We Are Here to Help!
We are offering free estate planning webinars right now! To register for a webinar, click here. Please note that estate planning law is state specific. Our office is located in Silicon Valley and our webinars are relevant to California residents.
- Do I Pay Income Taxes on Living Trust Payouts? - September 28, 2022
- Litherland, Kennedy & Associates is Walking in the 2022 Walk to End Alzheimer’s. Join Us! - August 29, 2022
- Establishing Health Care Documents for Young Adults – A Mock Interview (VIDEO) - August 27, 2022