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 eleven things that you shouldn't do when it comes to your estate plan.
DON'T:
1. Procrastinate,
or you'll leave your family with a mess. Even if you're not 100% certain who should get what or who should be in charge, an estate plan that meets 80% or 90% of your goals is better than no estate plan at all. Also, it's important for you to fund your Revocable Living Trust as soon as possible after the trust agreement has been signed, or your plan won't work if you become disabled and your assets will need to be probated after you die.2. Write your own will,
because estate planning is much too complicated to do it yourself. The laws that govern things like the legal formalities required to make a will, who can serve as a fiduciary (Personal Representative, successor Trustee, etc.), and who can be cut out as a beneficiary vary from state to state and can cause all sorts of problems for do-it-yourselfers. And generic forms found in a book or online can't give you personal advice and counseling. Only an estate planning attorney will be able to walk you through all of your estate planning options and then make a plan for you and your family that will work when it's needed because it's based on your unique situation.3. Worry about the cost,
or you'll procrastinate and leave your family with a mess. Cost should be only one of the things to consider when setting up your estate plan. Instead of worrying about how much it will cost, worry about finding an estate planning attorney that you feel comfortable with and who can help you achieve your initial and long term estate planning goals. If you focus on how you and your estate planning attorney "click" as opposed to how much the attorney's fees will be, the benefits that you and your family will receive will far outweigh the overall cost.4. Let your loved ones bully you into a plan,
or there'll be family disharmony and possible feuds after you're gone. I've seen it time and time again, where one child threatens a parent if their estate plan isn't set up in a particular way, or a second spouse who forces their new spouse to leave everything to the second spouse's family. In the end, you have the final say on your estate plan as far as who gets what and how and when they'll get it, so don't be afraid to make your own decisions. Inevitably someone's feelings will get hurt, but that's just too bad since it's your money.5. Over plan your estate,
or chances are you and your family will be unhappy and your estate plan may not work as you intended. Some estate planning techniques are so complex and confusing that it won't be worth it for you to pursue them as part of your overall plan. Do only the things that make sense to you and that you understand, at least a little. At the very minimum, work towards creating a foundational estate plan that meets your basic goals and then once this plan is in place look at advanced estate planning. The worst thing that can happen is to get confused by the more complicated techniques and, in turn, put off getting your basic estate plan. Take your time and listen to your estate planning attorney - the result will be an estate plan that works.6. Be afraid to ask questions,
or something important may be overlooked. Working with your estate planning attorney should be a series of questions and answers and then more questions. This will help your estate planning attorney to make appropriate recommendations for your situation and help you to understand why the attorney is recommending a certain type of document or a specific person to fill a fiduciary role.7. Listen to anyone other than your estate planning attorney,
or you'll become frustrated and confused. This is by far one of the biggest problems I encounter as an estate planning attorney - friends, neighbors, or even other professional advisors such as accountants, financial planners and other attorneys who know just a little bit about estate planning to be dangerous. By and large these individuals don't know all of the facts and give the wrong answer or simply don't know enough about estate planning to give the right answer. If you have a question about your estate plan or overhear or read something that causes you to have a question about your estate plan, simply pick up the phone or type an email and ask your estate planning attorney - no one else.8. Try to make it truly equal,
or you'll drive you and your estate planning attorney crazy. I've met with many clients who think that the only way to treat their children fairly is to keep a running tally of who got what while they were alive and then try to balance it out after they die. Not only does this add a level of complexity to an estate plan that the attorney should charge you extra for, but it can also leave the plan open to a variety of interpretations and attacks by your beneficiaries who disagree with your running tally. The more simple you make your foundational estate plan, the easier it will be follow and carry out your wishes.9. Forget about your stuff,
or there could a family feud in the making. By "stuff," I'm referring to your jewelry, collectibles, antiques, furniture, art work, cars, scooters and boats. In estate planning terms these things are called your "tangible personal property" or "personal effects." I've read many estate plans that call for the "equal" division of personal property among children or other beneficiaries. How can this be possible? Instead, create a specific written plan for your personal items so that there won't be any fighting over them.10. Forget about your pets,
or there could be another family feud in the making. Over the years I've dealt with abandoned and forgotten pets to down and out court battles over who should get Fido. Deciding who gets your pets is as important as deciding who gets your money - in fact, it's probably more important since your pets could be harmed in the process but your money can't. Many states even have specific laws governing trusts for pets. Specifying who you want your pets to live with and even providing financial support will go a long way to keeping family harmony and your pets safe and sound.11. Forget to update your beneficiary designations,
or your could leave a big mess behind. If you're married and get divorced, if you're single and get married, or if someone you've named as a beneficiary predeceases you, then your life insurance, retirement account, or annuity may not go where you want it to go. In the worse case scenario the insurance policy, retirement account, or annuity could be deemed to have no beneficiary at all, in which case the assets will become a part of your probate estate and subject to the claims of your creditors. Be sure to consult with your estate planning attorney on who should be named as the beneficiary of your life insurance policies and retirement accounts.
