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Avoid These Estate Planning Mistakes

Too many households commit these common blunders.

Many people plan their estates diligently with input from legal, tax, and financial professionals. Others plan earnestly but make mistakes that could affect both the transfer and destiny of family wealth. Here are some common and not-so-common errors to avoid as you go through the process.

1.    Doing it all yourself. While you could write/create your own will, it can be risky. Sometimes simplicity has a price. Take Aretha Franklin as an example. The Queen of Soul’s estate, valued at $80 million, may be divided per a handwritten, or “holographic,” will discovered among her personal effects after her death. Provided the will can be authenticated, it will be probated under Michigan law, but such unwitnessed documents are not necessarily legally binding.1

2.    Failing to update your will or trust after a life event. Relatively few estate plans are reviewed over time. Any major life event should prompt you to review your will, trust, or other estate planning documents, including events that affect one of your beneficiaries.

3.    Appointing a co-trustee. Trust administration is not for everyone. Some people lack the interest, the time, or the understanding it requires, and others balk at the responsibility and potential liability involved. A co-trustee also introduces the potential for conflict.

4.    Being too vague with your heirs about your estate plan. While you may not want to reveal all the details of your will prior to your passing, your heirs should understand the purpose and intentions at the heart of your estate planning. If you want to distribute more of your wealth to one child than another, write a letter, to be presented after your death, that explains your reasoning. Make a list of which heirs will receive collectibles or heirlooms. If your family has internal conflicts, this may go a long way in reducing squabbles. It can also lessen the possibility of legal costs eating up some of an heir’s inheritance.

5.    Leaving a trust unfunded (or underfunded). Through a simple, one-sentence title change, a married couple can fund a revocable trust with their primary residence. To illustrate: If a couple retitles their home from “Heather and Michael Smith, Joint Tenants with Rights of Survivorship” to “Heather and Michael Smith, Trustees of the Smith Revocable Trust dated (month)(day), (year),” they are free to retitle numerous other assets in the trust’s name.1

6.    Discounting a caregiver with ulterior motives. Very few people consider this possibility when creating a will or trust, but it does happen. A caregiver harboring a hidden agenda may manipulate a vulnerable or incapacitated loved one to the point where they revise estate planning documents for the caregiver’s financial benefit.

The best estate plans are clear in language, upfront about intentions, and updated as life events demand. They are managed through the years with care and scrutiny, reflecting the magnitude of the transfer of significant wealth.

Provided by Patriot Asset Advisors

Advisory services offered through: Patriot Asset Advisors, LLC an Ohio Registered Investment Advisor.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Opinions expressed are that of the author and are not endorsed by the named broker dealer or its affiliates. All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor.


1 – home/3747674002/ [5/20/19]

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