Estate planning is a responsibility we all have, young or old. Yet only about half of all Americans with children have a Last Will and Testament or Trust to direct how their children should be cared for and who should inherit any assets left behind after death. It’s also troubling to know that most estate plans haven’t been examined in the last five years, which means they could be extremely outdated.
Most adult children also have no idea if their parents made an estate plan, and if they do, then they may not know where those estate planning documents are located. All of these issues lead to one serious problem: the people who need to make important decisions during challenging times do not have the knowledge, access, or proper tools necessary to handle the situation correctly. Below are three of the most common estate planning mistakes, and information on how you can avoid them:
Outdated Estate Plan
An outdated estate plan can be the result of many things, including a falling out with family members, a divorce, a new marriage, or the birth of children and grandchildren. The problems start when these changes are not accounted for in your estate plan. Consider this example: if you were to disinherit a child but not change your Last Will and Testament to reflect this, then your child will still receive whatever inheritance you left to him or her. Divorce, marriage, the birth of children, and family fights can all make estate plans out of date, so it is important to speak with an estate planning attorney whenever those events occur, while also checking in at least once every five years to make sure everything is still the way you want it.
Face it: when money, belongings, and in-laws get involved, the situation is ripe for a family feud to break out, even amongst the most loving of siblings. This could be caused by unequal distributions or hurt feelings if a family heirloom is given to one sibling when another was expecting it. You can help to avoid these problems by having a conversation with your future beneficiaries to explain your decisions, or at the very least write a letter to each beneficiary that is to be read upon your passing that will serve the same purpose.
Sometimes parents do not leave enough assets to pay debts or estate taxes, which forces the beneficiaries to sell property such as homes or other valuables to pay off debt. Careful planning with an estate planning lawyer helps you avoid these kinds of money problems. It’s also a good idea to touch base with your DFW trust lawyer on a regular basis to discuss any changes in the tax laws or your financial situation so they can update your estate plan accordingly.
If you have questions about your current estate plan or you would like to get started on creating a new estate plan, please contact us at (817) 752-3307 to set up a consultation.