Wills, trusts, and other estate planning documents are essential parts of planning for the future and taking care of our families. Done correctly, these strategies can help preserve and pass down assets to our loved ones. At the same time, however, common pitfalls and mistakes can disrupt our plans. These errors can include:
Failing to Name or Change Beneficiaries on Accounts
Most bank accounts, retirement accounts and investment accounts allow and encourage the naming of contingent beneficiaries in the event of the account holder's passing. This allows the assets contained in the accounts to transfer smoothly to the beneficiary (usually a spouse or child) as quickly as possible. If no beneficiaries are named, the account typically falls within the person's estate and is subject to the probate court process.
It is important as well to keep beneficiaries updated as our lives change. In the event of a divorce, for example, people may forget to take an ex-spouse's name off a retirement or investment account – much to their family's surprise later when that ex-spouse stands to claim an IRA that was never updated.
Leaving Assets to a Minor Without Setting Up a Trust or Addressing Guardianship Issues.
You may have the best of intentions when leaving assets to a young grandchild, niece, or nephew. If these designations are not specific enough, however, disaster can ensue, and the child could receive far less than you imagined. Leaving an account or property to a child without clearly describing how the asset is to be managed if they are under 18 when you die can leave the funds to be frittered away by an uncaring relative, for example. You want to be as detailed as possible when setting out these goals in any type of estate planning document.
Not Keeping Your Estate Plan Up to Date
Like many other things, a good estate plan needs some attention and maintenance from time to time. Assets change, family dynamics change, beneficiaries may change or pass away, and changes in certain laws can impact property transfers or taxes. Taking the time to review your estate planning documents every few years can help you keep your plan updated and in line with your goals. These reviews do not have to take long – even a brief consultation with your estate planning attorney can clear up any confusion and keep your plans in focus.
Not Considering Long-Term Care
The prospect of long-term care is unavoidable for almost every family. Over 70% of Americans over 65 will require long-term care at some point. Making this part of an estate plan for you or a loved one can clear up power-of-attorney roles, advance care directives, and costs involved with long-term or nursing home care. The average monthly cost for nursing home care in northern Kentucky is over $10,000 for even a semi-private room, so it helps to prepare for this possibility before it happens and swallows a family's financial assets.
Not Consulting With an Estate Planning Attorney
Cutting costs through a “do-it-yourself” approach to estate planning can often end up costing more money and time for you and your family in the long run. Just as a doctor can provide better medical advice than a Wikipedia entry, an attorney with experience in estate planning can review the myriad considerations to think of when trying to protect and pass on our assets. Interestingly enough, consulting an attorney at the planning stages may help avoid the need for legal help in a lengthy probate process.
Our attorneys at Darpel Elder Law will take the time to discuss what strategies best suit your goals, and how Kentucky and Federal laws might impact your plans. The best way to avoid headaches later is to review all options now.
The Attorneys at Darpel Elder Law are Eager to Help You Meet Your Estate Planning Needs
Estate planning is one of the more complex tasks we will encounter in our lives – even if we do not believe we have many assets to manage. Reviewing your options with an experienced elder law and estate planning attorney can help to clear up the process and make things simpler. The Northern Kentucky Elder Law Attorneys at Darpel Elder Law know the strategies involved and common mistakes to avoid. To get started today, do not hesitate to contact Darpel Elder Law and begin the conversation about your future. Call our office at (859) 341-4100, or visit our website at www.darpelelderlaw.com.