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Avoid These Four Estate Planning Mistakes

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Avoid These Estate Planning MistakesThere are some common estate planning errors that can yield negative consequences on a few different levels. In this post, let’s explore some of them in an effort to raise awareness so you can steer clear of these costly mistakes.

Do-It-Yourself Estate Planning

You can find instructions to do just about anything online, and there are websites that sell boilerplate, fill-in-the-blanks legal documents including wills and trusts. Because many people procrastinate when it comes to this responsibility, this “simple solution” can sound appealing.

When you plan your estate, you are making preparations for the distribution of everything that you have accumulated during your life. These are final gifts to the people you love the most, so this is a very profound endeavor.

Why would you take risks with a bargain basement download that you purchase online?

A cynic could say that an estate planning law firm is going to take this stance for self-serving reasons, but you do not have to take our word for it. Consumer Reports put the matter of DIY estate planning under the microscope a number of years ago.

Staffers created wills using downloads and worksheets that they obtained from three of the most popular legal document websites. They engaged three prominent law professors to examine the documents.

They found flaws, and they stated that unintended negative results can come about when inexperienced people use these templates. After digesting the feedback they received from the legal educators, Consumer Reports advised readers to avoid DIY estate planning notions.

Procrastination

Many people think of estate planning as something you can get around to when you are old and gray. Clearly, we all know the approximate life expectancy of Americans, but people pass away before their time every day.

We are reminded of the fragility of life when we see tragedies like the Kobe Bryant incident, and COVID-19 has certainly opened a lot of eyes.

You never know what the future holds, and it can be argued that young adults need estate plans more than their older counterparts. After all, many people that are in their 20s, 30s, and 40s are the parents of dependent children.

Estate planning should be viewed is one of the basic responsibilities of adulthood, and you are not doing well by your loved ones if you are going through life without a plan.

Failure to Consider a Trust

Far too many people assume that a simple will is the estate planning document to use unless you are very wealthy. In reality, this is patently false, because the revocable living trust is the ideal estate planning centerpiece for a wide range of people.

If you have a living trust, you do not lose control of the assets, because you can act as the trustee. You would name a successor trustee when you establish the trust, and your heirs would be the beneficiaries.

One of the major advantages is the avoidance of probate, which is a costly and time-consuming legal process. A will would be admitted to probate, but distributions through the terms of a living trust are not subject to this process.

You can include spendthrift protections as well, so you can make sure that your loved ones do not burn through their inheritances too quickly.

Failure to Address Incapacity

It is not a very pleasant subject to contemplate, but a significant percentage of seniors become unable to handle their affairs eventually. You should definitely account for this possibility when you are planning your estate.

If you have a living trust, you can name a disability trustee to act as the administrator in the event of your incapacity. For property that is not held by a trust, you could empower a representative if you execute a durable power of attorney for property.

A durable power of attorney for health care should be included to account for medical decision-making, and a living will should be added to state your life support preferences.

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We are here to help if you are ready to work with a Staten Island estate planning attorney to put a custom crafted plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at 332-456-0500.

Neil O'Reilly
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About Neil O'Reilly

Cornelius (“Neil”) J. O’Reilly is an attorney whose practice is focused in the areas of Estate Planning, Estate Administration, and Business Succession Planning. His main goal is to demystify Estate Planning for his clients so they can gain peace of mind knowing that they have provided for their families by passing along their hard-earned wealth and by minimizing the stress they will experience if the client becomes incapacitated or dies. He has created the firm with the belief that an estate plan should be driven by the unique needs and desires of each unique client. That’s why there are no “cookie cutter” plans or canned solutions offered to any client. Instead, Neil helps clients identify their goals and then builds estate plans based on those goals.