The Most Important Estate Planning Mistakes to Avoid
Estate planning doesn’t just involve a last will and testament; the estate planning attorney that you work with should offer you a broad array of services, such as drafting living trusts and advising you on how best to avoid estate taxes; as well as a number of other issues and how best to handle them.
Below, we discuss some of the most important mistakes and topics that you should take into account as you embark on estate planning for you and your family with your attorney.
Naming Minors As Beneficiaries
A number of couples choose to name beneficiaries when it comes to their retirement accounts and/or life insurance policies. It is an excellent way to avoid probate and make sure that assets are provided directly to your chosen beneficiaries upon your death.
While some parents and grandparents have a desire to designate minor children or grandchildren of beneficiaries and, in Florida, an individual being a minor does not prevent them from acquiring and holding title to property, complications can arise out of a minor owning property or having property interest transferred to them, such as having to pay property taxes if this involves real estate. In this endeavor, the guardian of the child will then have to get involved in order to assist them. In addition, if the value of the property is greater than $15,000, the rights of those guardians are limited and that minor is also essentially limited in terms of what they can do with that property until they reach the age of 18 because they are not considered to be capable of entering into binding contracts. A better way of handling this is to simply leave your assets in the form of a trust for the benefit of a minor rather than handing it them as a beneficiary.
Drafting Your Own Will
Some people also try to draft their wills themselves. However, as attorneys who focus on estate planning, we see a number of issues arise with respect to these do-it-yourself wills, such as ambiguous, conflicting provisions, provisions that do not comport with state law, missing documents, documents that have not been executed properly, and a number of other issues. Typically, any money saved upfront in drafting your own will ends up being spent on legal fees trying to resolve problems during probate and after death.
Adding Joint Owners To Bank Accounts
Some couples are also interested in adding their child’s name to their bank account so that their children can assist them, as well as have access to funeral and funds to pay for a number of expenses after they pass. While this can be convenient for small accounts, be careful about doing this with larger accounts, in case that child gets divorced, files for bankruptcy, or encounters other liabilities, as creditors can obtain access to that account and its assets. Even setting up a joint ownership of an account can become an issue if your will does not spell out what your intentions were for this decision. Lawsuits and family arguments can be avoided when it comes to these issues by engaging in thoughtful estate planning and ensuring that you have the right trust planning and power of attorney in place.
Funding Your Trust
Also remember that you need to do more than just establish a trust; you also have to fund it. What this means is changing ownership of your assets so that those assets are owned by the trust or the trust is the beneficiary. If you do this properly, the trust avoids probate upon your death. In addition, it is also possible to shield those assets from estate taxes.
Keep in mind that this funding of your trust must be done before you pass away; and if you fail to do so, probate and taxes cannot be avoided. Your estate planning attorney that you work with can either provide you with funding instructions or handle that aspect of the estate planning for you.
You also want to choose any co-fiduciaries very wisely. Part of this involves being realistic about the ability for your children to work well with each other in terms of making financial decisions for you when it comes to healthcare, settling your estate, and making other important decisions. Forcing two individuals who do not get along well to share in these responsibilities can cause more problems in the long-term, so do not make your choices based on concerns over feelings; choose the person who you know will do the job well and ensure that everyone is treated fairly.
Contact Our Florida Estate Planning Attorneys
If you live in Florida, contact our experienced Orlando estate planning attorneys at the office of Gierach and Gierach, P.A. today to find out more about making wise estate planning decisions.