Here are the top ten estate planning mistakes that I continue to see. Hopefully this will help you avoid the same mistakes.
One: Not realizing there are multiple ways to jointly own real estate and not all of them transfer the property to the surviving owner without probate.
Two: Adding a co-owner to a bank account not realizing that adding a joint owner to a bank account is a gift of the entire amount of money in that account.
Three: Adding one child as a co-owner or beneficiary on an account with the understanding that after the parents’ death the child will then distribute the money between his or her siblings. While this does sometimes work, the child is under absolutely no legal duty to split the money. Even if he or she promised, since promises are not enforceable by law.
Four: Not realizing that solo ownership of a home will typically require probate to transfer it to someone else when the owner dies.
Five: Powers of Attorney expire at the death of the principal (the person who signed it).
Six: Thinking that having a will avoids probate. It does not. In fact, a will is the instruction manual for probate.
Seven: Not setting up any plan at all, waiting for life to stop changing before making a plan. Heads up, it never does…or if it does stop it’s too late.
Eight: Trying to design an estate plan that works perfectly in every possible scenario quickly leads to being overwhelmed which in turn leads to not moving ahead with a plan at all. Perfection can the enemy of progress.
Nine: Not realizing that a trust won’t avoid probate if you don’t rename your assets from your name to the trust’s name. I have done a number of probates for only one asset that was somehow missed and was not in the trust.
Ten: Waiting too long to start planning. After one spouse is incapacitated the planning options are more limited than there were when both spouses were fine.
Editor’s Note: This article was submitted by Ryan N. Morey, Esq. an estate planning attorney who founded Morey Law, P.C. and may be reached at (719) 465-4324, or at firstname.lastname@example.org.