Does Your Plan Make One of These 15 Fatal Mistakes that Can Endanger Your Family, Result in the Government Taking Too Much of Your Money, and Leave Your Family With a Huge Problem?
(Part 1 – Counting Down: Mistakes #15 -11)
Regardless of whether you’ve prepared a plan for what will happen in the event of your death or incapacity, a plan is in place. It’s the people you love the most who are going to have the burden of dealing with the plan you leave behind. Do you want the government to choose that plan? Or would you rather be the one who chooses? This brings us to the first of 15 Mistakes that Can Hurt Your Family.
Mistake # 15: Thinking Things Will Take Care of Themselves.
I know that caring for your family is your first priority. You wouldn’t have taken the time to request this report and be reading it right now if that wasn’t the case.
And, I know you want to do everything in your power to ensure they have all the guidance and resources they’d need in the event of your death or incapacity.
If you’ve never taken action to plan your estate, or if you haven’t updated your plan within the past two years to reflect changes in your family structure, your assets and the law, you must be under the false impression that everything is taken care of. It probably is not.
If you have any uncertainty about what would happen to your children and your assets upon your death or incapacity, you are putting your family at risk. I often see family members dealing with the fallout created by a loved one who thinks s/he has taken care of everything.
Your plan must be reviewed at least every three years to ensure it keeps up with your life, your family, your assets and the law. And, you must have a full understanding of your plan to make sure that it continues to meet your goals and objectives.
Mistake #14: Thinking that a Will Is Enough.
Unfortunately, relying on a Will often causes bereaved loved ones significant time, cost and confusion. Having a Will ensures that the courts will be involved in the transfer of your assets after your death. This leaves your family tangled in the costly, time-consuming nightmare of probate (see Mistake #13.) Additionally, a Will creates confusion because it directs only where your assets go, not how they will get there. A Will is not enough to keep your family and your assets secure in the event of your death or incapacity. In fact, where there is a Will, there is a probate.
Mistake #13. Owning Assets in the Wrong Way.
Probate is a court process that takes a minimum of 12 in Massachusetts and can cost those closest to your heart tens or hundreds of thousands of dollars, depending on the size of your estate.
Your family might find itself dealing with probate if you own assets in your own name, or if you designate beneficiaries of retirement accounts and life insurance policies the wrong way. I know you would never want your loved ones to experience a probate. And—they don’t have to!
Probate is something that everyone can opt out of, but only by taking action.
Far too often, I have seen people spend thousands of dollars on estate plans, only to make the tragic mistakes of designating their beneficiaries incorrectly and failing to re-title their assets properly. Either of these mistakes will result in an unnecessary and wasteful court process. To avoid probate, assets must be titled in the name of your Trust, and minors cannot be named as the beneficiary of a life insurance policy or a retirement account.
Mistake #12: Imposing Unnecessary Stress on the Surviving Spouse by Failing to Personalize Your Estate Plan.
Far too often, attorneys prepare form documents for their clients that do not address the individual needs of their families. This can be a costly, and at times frightening, mistake that the surviving spouse must then deal with alone. Make sure you know what happens in the event of the first death of you or your spouse, and that the decision hasn’t been made for you by a one-size-fits-all form. All families are different. Your estate plan should always reflect your individual needs. This mistake also applies to Mistake #11.
Mistake #11: Missing Special Provisions that Protect the Surviving Spouse from Predators (e.g., Future Husband or Wife) and Creditors (e.g., Lawsuits).
When appropriate, your plan can be drafted to provide real protection from lawsuits for your surviving spouse by ensuring that at least half of all your assets are shielded from outside threats, such as future divorce or lawsuits against the surviving spouse. Whether this protection should be included in your plan is a question that must be discussed with your Personal Family Lawyer®. Customizing your plan can ensure protection of your assets.
To your family’s health, wealth and happiness!
David Feakes
P.S. Want to get started on the most important planning you’ll ever do for your family? Give our office a call at (978) 263-6900 to get started. You’ll be so glad you did.
David Feakes is the owner of The Parents Estate Planning Law Firm, PC – a law firm for families in the Acton, Massachusetts area. David helps parents protect the people they love the most. If you would like to receive David’s exclusive, free report, “Six Major Mistakes To Avoid When Choosing An Estate Planning Attorney,” you can get it right here.
The Parents Estate Planning Law Firm, PC
