Estate planning is more complex than most people assume. Making a mistake during estate planning can drastically set you and your loved ones back, making it impossible to retire like you planned, or leaving your adult children with an unclear understanding of your inheritance wishes. These errors can be avoided by working closely with an experienced Maryland nursing home attorney. Below are the five most common mistakes that people make when they create an estate plan.
Signing an Estate Plan That You Do Not Fully Understand
91 percent of people sign legal terms and conditions without actually reading what they are signing, according to Business Insider (is there a link to this?). Do not let this happen to you during the signing of your estate plan. If you do not understand exactly what you are signing, you need to let your attorney know so that they can better explain it to you. There are serious consequences for creating an estate plan that does not accomplish what you want it to.
Not Updating the Estate Plan Often Enough
An estate plan should be revisited every five years or so, according to Forbes, or whenever you have a major life event such as marriage, the birth of a child or grandchild, divorce, or the death of a spouse or loved one. Other reasons to update an estate plan include changes to your net worth, the loss of a job, or a change in residence.
Not Funding Revocable Trusts
Creating a revocable or living trust is just the first step. Trusts need to be funded to be of any use, otherwise your assets will go through probate and potentially be improperly distributed to your heirs. Certain assets are easy to fund a trust with, while others, such as real estate and automobiles, are more complex. Your estate planning attorney can guide you on best practices.
Forgetting to Update Power of Attorney or Failing to Create a Power of Attorney
Power of attorney lets a responsible party make decisions on your behalf should you become incapacitated due to a medical issue. One power of attorney can give financial decision making to the trusted individual, while a separate power of attorney gives that person or another individual the ability to make medical decisions for you. If, for example, you listed your spouse as your power of attorney, and your spouse passes away or develops dementia, you need to update your powers of attorney to include a person capable of making these tough financial and medical decisions for you.
Failure to Coordinate Trusts and Retirement Plans
There are countless ways to avoid over taxation during estate planning, both for yourself and for your loved ones. For tax-saving purposes, it is essential that you create a see-through-trust if you wish to name a living trust as a beneficiary of your retirement plan. Naming an individual as a beneficiary to a trust is less complicated, yet both require the careful guidance of an estate planning attorney.
Call a Maryland Estate Planning Attorney Today
You can avoid these common mistakes by working with the qualified lawyers at Frame & Frame. We provide a very personalized approach to legal issues by listening to your story and creating unique solutions to take the weight off your shoulders. To schedule a free telephone consultation with one of our Maryland estate planning attorneys, call us today at 410-255-0373.
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Resources:
businessinsider.com/deloitte-study-91-percent-agree-terms-of-service-without-reading-2017-11
forbes.com/sites/deborahljacobs/2012/08/09/when-should-you-redo-your-will/
https://frameandframe.com/why-estate-planning-is-critical-for-those-in-the-lgbtq-community/