Throughout my years of practice as an estate planning attorney, I've observed a multitude of situations, both good and bad, that were the direct result of someone's incapacity or death. From these observations I've compiled a checklist of common sense and not so common sense tips and tricks that everyone can benefit from when it comes to planning their estate. Here is a list of nine things that you should do when it comes to your estate plan.
DO:1. Work with a qualified estate planning attorney,
or you're setting yourself up for failure if you try to do it yourself. Imagine that you drafted your own Last Will and Testament and Revocable Living Trust, but failed to have them properly witnessed and notarized as required by the laws of your state. Next imagine your loved ones spending thousands or even millions of dollars fighting over your estate because your Last Will and Revocable Living Trust were invalid since you did them yourself. Work with a qualified estate planning attorney so that this doesn't happen to you and your family.2. Designate a guardian for your minor children,
or a judge will decide who will take care of them. Who will be responsible for taking care of your minor children if you die unexpectedly - will it be Grandma, Mom and Dad, or your sister or brother? All may be equally qualified, ready, willing and able to serve, but only one can serve as the court-appointed guardian. This will cost your loved ones thousands of dollars to sort out, and in the end it will be left to a judge to figure out what you would have wanted and what will be in the best interests of your children. Instead, take the time to create a basic estate plan and choose your own guardian for your children and also a backup in case your first choice can't serve.3. Plan early and while you have your wits about you,
or you can't be helped once you've lost your mental capacity. At least once a month I receive a phone call from a child asking what they can do about selling their mom's house to pay her bills now that she's mentally incompetent and living with them, and at least once a month I have to tell the child that it's too late to do anything other than go to court and be appointed as mom's guardian or conservator.4. Promptly provide your attorney with requested information and documentation,
or how can your attorney really help you? Estate planning is a complicated process to begin with, but if you fail to provide your attorney with important documents, such as prenuptial agreements, divorce documents, deeds to your real estate, or shareholders agreements, then your plan will simply not function the way you intended. Work with and not against your estate planning attorney so that your estate plan will be complete.5. Be open and honest with your attorney,
or your estate plan will be incomplete and your beneficiaries will end up in court. Imagine that you already have an estate plan in place for one set of beneficiaries and you decide to have a whole new plan prepared by a new attorney for a different set of beneficiaries, but you fail to disclose to the new attorney that you already have a plan for the first set of beneficiaries. Imagine next that your estate is worth $25,000,000+ when you die and it's unclear which plan you intended to control your estate since the plans overlap in many areas. This is a true story, and after over $1,000,000 in attorney's fees, all of the beneficiaries of both plans were equally unhappy with what they ended up receiving.6. Inform your fiduciaries of their appointment and how to contact your attorney,
or your fiduciaries and attorney will be in for a big surprise. There's nothing more disconcerting to an estate planning attorney then finding out that a person designated as a fiduciary is shocked at being appointed and really doesn't want to serve, or, worse yet, that the fiduciary is nowhere to be found.7. Completely fund your Revocable Living Trust,
or some of your assets will end up in probate. Many people fail to realize that funding their trust is just as important as creating it. If an asset isn't titled in the name of the trust, then the trust agreement won't control what happens to that particular asset and it will need to be probated in order for your loved ones to gain control over it.8. Take a look at your plan every year to insure that it still makes sense,
or your plan will become outdated and won't work when it needs to. Many people fail to realize that estate planning isn't a one time transaction. Throughout the course of a year, let alone several years, things change that will affect your estate plan. Keeping on top of these changes year in and year out will guarantee that the plan will work when it needs to work.9. Choose your fiduciaries wisely,
or they and your beneficiaries will wind up in court. Why choose your sister to serve as trustee for your children if you know they don't get along? Why choose one of your children to serve as trustee for your other child if you know they don't get along? Why choose both of your children to serve as co-trustees if you know they'll never be able to agree on anything? Why choose your child who's really bad at managing their own money to be your successor trustee? Instead, work with your estate planning attorney to make informed choices for your fiduciaries.This is just the beginning. As I continue to work day in and day out with my clients, I'll add more estate planning "Do's" to this list.
