At Estrada Legal PC, we take pride in helping our clients handle every legal aspect of estate planning. Creating a Living Trust or Will for the future is important and our team of legal professionals is available 24 hours a day, 7 days a week to help you establish a Living Trust. Most people know the important things to add to a Living Trust or Will including the house, car, and personal belongings, but there are certain important things many people omit from their estate planing. People always think about who will care for their children when they pass, but what about the family pets? Or what if a divorce occurs, what factors of estate planning are affected? Today Estrada-Legal PC is providing a list of mistakes people make when it comes to estate planning. The list provides ten issues that people may forget to consider when writing a Will or Living Trust for the future. Estrada-Legal PC wants to make sure you cover every aspect of your estate and plan accordingly.
10 Biggest Estate Planning Mistakes
1. Procrastinating. While some of us would like to think we’re immortal, the time will eventually come when all of us will meet our maker. That’s why it’s important to push clients to have their own estate plan, before it’s too late, and state laws intervene by creating one for them.
2. The DIY Mentality. While a “do-it-yourself” mentality may be admirable for some things, it is often wise for clients to seek a professional advisor when treading the murky waters of estate planning.
3. Failing to Think from All Angles. Sometimes clients get too invested in a particular planning approach, and forget to look at the big picture. While advisors should offer solutions to clients, they should also provide clients with “what-if” scenarios, so that they are fully prepared for what might go wrong.
4. Divorce. Often clients do not take into the account that they might get divorced. As a contingency, clients can place restrictions on the money in the trust being distributed outside of the family. Or they could use a discretionary distribution standard that gives discretion to the trustees.
5. Missing the Fine Print. The fine print in estate planning documents can be the difference between retirement in the Bahamas or in a trailer home. To avoid being manipulated by the fine print, make sure the client and any professional advisors involved has dotted every “i” and crossed every “t.”
6. Forgetting Pets. Sometimes, clients forget to consider pets, and so when they die, their pets often have to follow them to their grave. Set up a pet trust to care for animals after the client dies.
7. Failing to Update All Documents. Failure to update or title clients’ other documents may erase any benefits that estate-planning documents offer. Make sure the client re-titles the assets in the name of the trust, not themselves, for clarity. And check regularly to ensure that beneficiary designations on all retirement documents are up to date. (They might not want that $1 million to go to their deadbeat ex-spouse anymore.)
8. Underestimating Trusts. Some clients assume that trusts are only for minor children. In actuality, trusts are asset-protection vehicles for the entire family, and can protect the assets from the claims of creditors.
9. Failing to Consider Digital Assets. When a client dies, their spouse or other heirs may not have access to the password for digital assets. As a result, there’s value that they can’t get to. To prevent this, make sure those clients have a list of all their online user names and passwords, and that the appropriate family member or trustee has access to the information.
10. No Passing on of Digital Libraries & Music Collections (Yet). As of this writing, clients cannot pass their digital libraries and music collections down to their heirs, due to terms of service of the major sellers of digital content. While this may change in the future, clients will just have to accept this fact for now.