AVOID THESE COMMON LEGACY MISTAKES
Legacy Planning is not easy so you will want to avoid these common mistakes. I have run a successful law center for over two decades helping clients with estate planning, probate, and trust administration. Clients contact my office when they are in the season of legacy planning and they are seeking legal guidance and assistance. I have discovered that there are three common mistakes that people make that can be avoided.
Mistake #1: Failure To Review Financial Accounts
Failing to review your financial accounts is a big mistake. Legacy planning requires careful review of your financial accounts. You need to know where you hold your accounts and who to contact. You need to review them to determine if you have a joint owner or a pay on death owner. For example, if you have three children and you want them to inherit your estate equally you will not want just one of them on your joint account. I do not recommend adding a child to your joint account. The child who is jointly on your bank account will receive the entire account upon your passing; they do not have to share it with their siblings. To prevent this unwanted result, you will instead name all three children on your account as pay-on-death beneficiaries. You can also hold your account in trust or have a Power of Attorney which will allow the person you name to access your account if you become incapacitated and need someone to access your funds to pay your bills. When your accounts are held in trust or you have a pay-on-death beneficiary named you will also be able to avoid the probate court process upon your death.
Mistake #2: Failure To Put Estate Plan In Writing
Failing to put your estate plan in writing is a big mistake. For the last 23 years I have been an advocate for legacy. I remind people if they die without a Last Will And Testament then California law will write a will for them. I recommend that once they have made decisions about who will act on their behalf and who will receive their estate, they will need to put their decisions in writing. If they fail to put their decisions in writing and they become incapacitated or die, their estate will be subject to a court procedure. A conservatorship will be court appointed to make financial and health decisions for them if they become incapacitated without legal documents in place. Following their death, a probate matter will be opened at their local courthouse, and an administrator will be court appointed to gather their assets, pay their debts and divide what’s left over. When you put your estate plan in writing you can avoid these costly court procedures.
Mistake #3: Failure To Review Legal Documents
Failing to review estate planning legal documents is a big mistake. I recommend that you review your documents at least every five years to determine if any updates need to be made due to change in circumstances which could be the result of change in marital status, change in accounts or real property holdings. Be sure to review who your beneficiaries are and who you have nominated in the important role of Executor and Trustee. You will also want to update your documents to provide for a minor child or a disabled beneficiary. By reviewing your estate plan, you will be sure to make amendments or updates when needed.
