The Ultimate Guide To Common Estate Planning Errors – And How To Avoid Them

Picture the scene: Reno, Nevada. The young newlyweds are ready to start their lives together. Some bureaucratic hoop requires that they get a will drawn up. It is the internet era. Instead of looking up a Reno estate lawyer or a business planning attorney, they decide to go with an easily-available online will, and then forget about it. End scene.

Cut to twenty years later. He is a very successful doctor, and she has her own interior design company that does a modest trade. They have two kids; both achievers, both in college.

A tragic car accident suddenly ends the lives of this happily married couple. The children are devastated, the family is shocked. A friend suggests that at least the children are taken care of, and everyone nods. Surely they must have hired their local Reno estate attorney to handle the business planning.

But a few weeks later, to their horror, the children discover that there is no college fund, they don’t even have a house to go home to because the banks and the state have taken everything.

End scene. Fade to black.

How could this have happened to such a successful couple? The answer is simple: poor estate planning.

Many couples make this kind of innocent and obvious error in judgment, believing that the law is the law, but there is no substitute for a good trust lawyer or estate lawyer in Reno, Nevada, or anywhere else, for that matter. Here is the ultimate list of estate planning errors, and how to avoid making them.

Thinking You Have More Time

Any qualified Reno estate attorney will have a story or two about the client who thought he had more time, and left this earth intestate. The family will have had to hire a probate lawyer nv to help them sort out the estate. It takes time and money, and it is an easily avoidable error. You are never too young to get help with effective estate planning.

Similarly, you should also develop an overall plan which can change and adapt to your circumstances.

Take the couple in Reno. If they had found a good estate planning or business planning lawyer, they could have grown their plans with the advice and guidance of a qualified practitioner, who would have advised them on trust planning and other ways to protect their assets, as they grew.

Keeping Your Plans To Yourself

Often, people do not want to discuss such a sensitive and possibly controversial thing as how their assets will be divided when they die. This leads to a lot of unnecessary family drama and miscommunication on all fronts. It complicates the job of the estate attorney.

Family members and friends will hold certain expectations which should be managed to avoid conflict and further legal proceedings. For example, it may seem like a perfectly responsible idea to leave the charge of your five cats to your best friend, but your best friend might not think so.

It is generally accepted that death is a maudlin topic to bring up at the dinner table, but you should set aside a time and place to discuss your decisions with those who are named in your will as beneficiaries, trustees or executors. This will help to ensure that your wishes are carried out the way you envision them to be, without confusion or ill feelings.

Leaving It All To Your Partner

This is a poor business planning move for two reasons. Firstly, if you instruct your estate lawyer to make your entire estate over to only one person, be it your spouse or anyone else, and that person is already deceased when your will takes effect, it becomes complicated, and your estate could become tied up for a long time.

Secondly, there are much heavier tax implications for one sole beneficiary. You might think you are doing your partner a favor by leaving everything to him or her, but in reality, you might be giving it all away to the tax man.

When you consider who to name as a beneficiary, you should make a list of primary beneficiaries, and then make another list of secondary or backup beneficiaries. You should also consider consulting a nv tax planning attorney to advise you on how best to split up your assets so that their worth is not swallowed up by unforeseen liabilities.

Relying On DIY Templates Instead Of Experience

There is no substitute for years of professional experience in the practise of Estate Law and related fields. While it may cut costs in the short term to look for a do-it-yourself online option, in the long term, this can lead to complications which could even invalidate your will.

It is always best to spend the money and have the document drawn up by a qualified legal professional who will tailor it to your own needs, thus eliminating any clauses, phrases or paragraphs which might not apply to your circumstances, or could be interpreted wrongly by an outside party.

Not Knowing Your Executor

This error could affect your children’s and spouse’s futures, so it is important to be aware of how to avoid it.

The executor effectively controls how and when the beneficiaries get everything, and there needs to be a strong emphasis on trust and professionalism. You should build a solid, professional relationship with the probate attorney and executor of your will. You want this to reflect the time and care you have taken in deciding how to dispose of your worldly goods once you have moved on.

Ignoring The Possible And The Inevitable

Far too many families end up in crisis because someone – usually the head of the family – forgot to nominate a healthcare proxy, power of attorney or advance directive. These are aspects of life that we all prefer not to think about or plan for, but they are important decisions that should be made.

You need to consult with your probate attorney to determine who you should trust  to make healthcare decisions on your behalf when you are unable to. An advance directive can help to guide your healthcare proxy in the decisions that are made, and will protect you and your family from decisions that might be against your will.

You should also consider who to nominate for financial power of attorney. This should also be in consultation with a legal expert in estates planning.

Forgetting The Internet

When loved ones pass away, no-one thinks about how to handle the deceased’s Facebook and Instagram accounts. Sometimes, they linger there for months or even years.

You need to consider what instructions to leave for winding up of your social media spaces. Similarly, the other platforms where you have an online presence should feature in your instructions. These can be items like a Spotify account, email accounts, bank accounts or virtual community memberships like gaming and education portals.

Not Considering Your Lifetime Gifts

Sometimes, when thinking about how to dispose of their belongings, people forget about their own personal interests they hold while alive. This could be their regular contribution to a cat sanctuary, sponsorship of an annual charity event, or even their own children’s education and welfare.

This can be avoided by discussing your monthly or annual expenditure with your estate planning attorney, who will be able to advise you on how best to continue these contributions as a legacy once you have passed on.

Missing The Cash

It is possible to pass on with millions of dollars in assets, but absolutely no liquidity or available money, which is a problem because before anyone can have anything, the tax man will need his share. You cannot sell off any assets until they have been paid for in taxes. It can create a conundrum for families left behind.

This is why it is important to ensure that there is a small float of actual, usable money available to your probate lawyer to pay the liabilities incurred by the transfer of assets. You might also want to consider including similar funds for funeral arrangements, or your personal choice of final farewells.

Other Financial Oversights

When individuals create estate planning documents, they sometimes lack the financial knowledge or legal knowledge to think of everything. For example, when property is held in community, there is no point to drafting a will because it all goes to the spouse by default. There may also be a flaw in how your trust receives money or releases it. You may find that your life insurance may not cover your liquidity needs, or you have over- or underestimated the value of your business and its assets.

These kinds of issues can be prevented by consulting with a qualified, experienced business planning lawyer, who will notice the pitfalls and point them out to you, and suggest ways to fix the problem before your loved ones have to deal with it.

For assistance in creating a well-considered and error-free estate plan, contact us here to request a consultation.

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