There are some estate planning errors that people often make that yield negative consequences. With this in mind, we will look at three of these common mistakes in this post to help you steer clear of them.
Do-It-Yourself Estate Planning
If you conduct a search to find information about estate planning, you will invariably see ads for companies that sell do-it-yourself simple will templates. They claim that it is easy for anyone to plan their own estate without any legal assistance.
It is possible for a layperson to create a will that is legally binding, but is this a suitable DIY project? After all, when you plan your estate, you are passing along your legacy to the people you love the most.
There can be a great deal of money involved, and there is certainly a sentimental element. The stakes are high, and there are elements that a layperson with no experience in the field would not understand.
A number of years ago, the highly respected, objective publication Consumer Reports put the subject of do-it-yourself estate planning under the microscope. People on their staff created three different wills using online tools that were sold by the most popular legal document websites.
They used hypothetical circumstances that are typical, and they engaged three prominent legal professors to examine the documents and provide feedback. Consumer Records was prepared to recommend these products if the attorneys gave their stamp of approval.
In fact, they came away unimpressed, and they said that unintended negative consequences can come about when these downloads and worksheets are used by non-professionals.
Ultimately, the publication advised readers to steer clear of DIY planning unless the situation is very simple and straightforward.
Failure to Update the Plan
The vast majority of American adults do not have estate plans in place, so procrastination is very common. After they finally take action, a lot of people put their documents away for safekeeping and they forget about the matter.
Over the years, circumstances can change, estate plan revisions may be necessary. There are those that know that updates are needed, but they keep telling themselves that they will have time to do it later on.
Others are not aware of changes to relevant laws that impact elements of the estate planning process, so they see no reason to act.
When you put your initial estate plan in place, you should recognize the fact that this is an ongoing process. Unless you create your plan during the final stages of your life, updates are probably going to be necessary.
Even if you are not aware of a particular reason why you should revise your plan, you should schedule periodic reviews with your estate planning attorney to make sure that it is up to date.
Failure to Address Long-Term Care Costs
When you have been fully capable of handling all of your own day-to-day needs all your life, you may assume that you will never need living assistance. Yes, there are those that do, but you are not going to be one of them, right?
In fact, 70 percent of seniors will need help with their activities of daily living, and over half will require paid long-term care. Medicare does not pay for custodial care, and it is very expensive.
Medi-Cal will cover these costs if you can gain eligibility, and you could use an irrevocable, income only trust to develop a profile that will lead to Medi-Cal eligibility. Advance planning is key, because the trust must be funded at least five years before you apply for Medi-Cal.
We Are Here to Help!
Today is the day for action if you are going through life without an estate plan. You can set up a consultation appointment at our Bluffton, SC estate planning office if you call us at 843-815-8580.
If you would rather reach out electronically, fill out our contact form and we will get back in touch with you promptly.