When We Make Estate Planning Mistakes We Risk Our Family’s Futures
Mistakes? We all make them. It’s just that some have longer lasting effects than others. Take estate planning, for example. Let’s look at six common estate planning mistakes and how to avoid them.
1. Not Updating Your Estate Plans
Chances are, your life has changed in the past year or two. Any time you experience a major life event is a good time to make sure your estate plans are still workable. Estate plans that are out of date when you need them can cause more trouble than not.
At least once a year, look over your Will, durable power of attorney, healthcare power of attorney, and any other estate planning documents you’ve executed.
2. Not Planning For Disability
No one wants to become disabled. Yet, many people face disability and incapacity every year. So, what can you do to plan for something that may not happen?
Insurance is sometimes an option. Short-term and long-term disability policies may be available to you, either through an agent or through your employer.
The cost of long-term nursing care hovers around $7,000 per month for a private room in a nursing home. Ouch! Insurance may cover some of the cost, but many people dig into their savings. There are other options available.
Medicaid can be used to pay for long-term nursing care. However, you must complete complicated applications, provide supporting documents, and meet income and resource limitations.
Disability planning begins long before you need it. Insurance policies may not be available after you reach a certain age. Medicaid looks at your finances for the five years prior to your application. Your eligibility can be affected if you transferred asset during that time.
3. Not Using The Right Documents
Do you know the difference between a revocable trust and an irrevocable trust? A Will and a pour-over Will? Or a power of attorney and a durable power of attorney?
Consult an attorney about your estate planning documents. Using the wrong document could have consequences for your loved ones for years to come.
4. Choosing A Bad Executor
Just because your brother has a great sense of humor doesn’t mean he will make a great executor for your estate. Find someone with the skills, knowledge, and experience to handle an executor’s responsibilities. For example, an executor gathers and manages your assets during probate. A bad executor could neglect assets, causing them to lose value. Choose wisely.
5. Titling Property Incorrectly
Property can be titled as a joint tenants with right of survivorship, tenants in common, community property, community property with right of survivorship, beneficiary designation, or in trust. When property is not titled correctly, it may end up the subject of a lengthy probate. Your heirs may need the property soon after your death provide for their needs.
Talk to an attorney about all your property to make sure it is titled correctly.
6. Failing To Fund A Trust
Signing a trust document is not the final step in establishing a trust. Once the trust is created, the trust maker must transfer assets to “fund” the trust. If you miss this step, your assets will pass through your Will or by Arizona intestacy laws.
Made Any Estate Planning Mistakes? We Can Help You Fix Them
The attorneys at the Keystone Law Firm assist clients every day in setting up customized and advanced estate planning. Call us at (480) 418-8448 to set up an appointment. We offer services for clients throughout Arizona, including Chandler, Gilbert, Sun Lakes, Tempe, Phoenix, Mesa, Scottsdale, and Apache Junction.