Three Estate Planning Mistakes YOU Want to Avoid

Alright, I’ll level with you, estate planning isn’t exactly a fun topic. You have to think about death, old age, incapacity, and what would happen to the people you’re responsible for if you’re not there to take care of them. Given the uncomfortable subject matter, it’s no surprise people often put it off getting a plan in place until it’s too late.

That's right, the biggest threat to your family isn’t an unexpected freak accident. It’s actually procrastination. Something we engage in every day. No one who has been educated on estate planning would say it’s not important. But since it does not feel urgent, you procrastinate on it. And this can cause serious problems and unnecessary stress for your loved ones when you become incapacitated or pass away.

To make matters worse, services like LegalZoom, Rocket Lawyer, and Trust&Will make it seem like estate planning is a quick D.I.Y. project, like it’s something you can knock out in thirty minutes. They show you some forms, you fill them in, and you’re done. Right…? Wrong! There’s a lot more to it than that. When done correctly, estate planning should not be an impersonal cookie-cutter service.

Also, if you don’t understand the legal procedures behind how these forms work, especially in relation to your unique family dynamic and assets, you’re almost certainly going to make some big mistakes. And these mistakes cause unnecessary headaches & grief for the people you were trying to protect.

To help you make the right decisions so that you can keep your family out of court & court of conflict, here’s three common estate planning mistakes to avoid:

1. Having No Estate Plan at All

The most common mistake is not having an estate plan in the first place. If you pass away without an estate plan, your loved ones will have to go through probate so a judge can decide how to distribute your belongings. This is less than ideal.

After your creditors take their pick, the judge will apply your state’s intestate succession law, which prioritizes your spouse & kids, then other close relatives like your parents and siblings.

If you’re single and have no kids, your assets might go to your parents or siblings. If you don’t have any of those, your assets could end up with even more distant relatives. However, if no living relatives can be found, the state gets everything. At no point are unmarried partners or friends entitled to your assets under the intestate succession law. So, if you want a friend or romantic partner to inherit anything, you need a plan.

Even if you’re married with kids, things can go awry. For example, if you’re married but have children from a previous relationship, you could end up in a situation where your spouse gets everything, and your kids get nothing. Or perhaps you’re not on great terms with your kids or don’t want them to get their inheritance all at once. If you don’t create an estate plan that formalizes your wishes, the state decides how things are divided, not you.

Also, without proper planning, your loved ones could end up in a nasty court battle over control of your assets. If you become incapacitated, there could also be arguments over your course of treatment. These are difficult & emotionally charged situations. Families will often fight over these things even if there is no money involved. A properly executed estate plan can prevent this kind of conflict, making things smoother for everyone involved.

2. Only Having a Will

A very common misconception, especially among older adults, is that a will is the only document needed to have a complete estate plan. That’s not correct. While it’s true that a will is an essential part of any estate plan, it has its limitations. These limitations are covered by other estate planning documents:

• Revocable Living Trusts: A will requires that your family to go through probate, a court process that can be lengthy (averaging 18 months), exposing (probate is a court process that ends up in the public record), difficult (your loved ones will be grieving your loss), and expensive (could cost as much as 6% of your estate.)

• Advance Healthcare Directive: A will is only effective if you’ve passed away. If you’re incapacitated, an advance healthcare directive is how you’d let people know your end-of-life wishes or who should make healthcare decisions for you while you cannot.

• Durable Power of Attorney: Like the Advance Healthcare Directive, but for financial, business, legal, and other personal decisions. If you’re incapacitated, but others still need you to pay your bills, run payroll, or sell an asset, a Durable Power of Attorney allows you to give someone else the authority to make those decisions on your behalf.

3. Not Naming Guardians for Children Under the Age of Eighteen

If you have custody of children under the age of eighteen, naming guardians for them should be one of your top priorities. Guardians are the people who would take care of your children should something happen to you. Should the time come when a guardian for your children needs to be named, it’s open season. Anyone can apply to be appointed guardian. Yes, even that one person you’d never want raising your kids. They could be appointed guardian. That’s why it’s crucial to name guardians if you haven’t done so yet. Only naming guardians in a will won’t avoid these problems.

That’s because, as discussed earlier, a will only takes effect after you die. So, if you become incapacitated and can’t care for your kids, a will won’t help.

But, let’s say your will has become effective, your children could still end up in temporary care until the guardians you named can arrive.

Assuming of course, that your guardians live close by and know where your will is…

To avoid these issues, TealAcre has received specialized training to provide Kids Protection Plans, which make sure your children are always cared for by people you trust, even if the worse happens.

Not a Mistake: Working with TealAcre

These are just three mistakes you can make when it comes to estate planning. There are many more, but hiring TealAcre is not one of them. Our comprehensive Family Wealth Planning Session process is designed to guide you in creating an estate plan that keeps your family out of court and conflict.

On that note, I’m having an in-person seminar on estate planning, titled “How to Keep Your Family Out of Court & Conflict on Thursday, September 12, 2024 at 4:00pm. It’s being hosted at FLCBank, located at 241 SW 7 Terrace, Gainesville, Florida 32601. To register call (352) 224-9811 or click here: https://lnkd.in/gi4a7Mtv

But, if you can’t make it, You read this far because you’re curious about estate planning. And, you’re curious about estate planning because you have questions. These questions can be related to what will happen to your family, your assets, or business should anything happen to you. Instead of going at it alone, let TealAcre help you get the clarity and peace of mind you’re looking for. To contact us you can:

Schedule a complimentary 15-minute consultation by clicking here.

Register for our next event by clicking here.

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