Sometimes you can learn valuable lessons when you hear about the mistakes that have been made by others. With this in mind, we are going to look at a few common estate planning errors of omission to raise awareness so you can steer clear of them.
The ultimate error of omission is to go through life without any estate planning at all, and a lot of people make it.
Caring.com has been conducting annual surveys to gain an understanding of the estate planning preparedness of American adults. Their research for 2023 has been released recently.
They found that just 34 percent of adults had wills or trusts. You might think that most people that are 55 and older have plans in place, but in fact, 54 percent of them are completely unprepared.
If you do nothing and pass away without a will or trust, the state will be forced to step in to make sure that final debts are paid. Ultimately, the remainder will be distributed using the intestate succession laws of the state of California.
People that you would have never left out could be disinherited or shortchanged under these circumstances. There is no reason to take this type of risk when highly qualified estate planning assistance is just a phone call away.
Failure to Explore Options
Far too many people think that estate planning boils down to the act of executing a simple will. In reality, a trust would be a better choice for most people that have been reasonably successful throughout their lives.
The living trust is a versatile tool that is the second most commonly utilized estate planning device. This type of trust gives you the ability to maintain a modicum of dead-hand control.
You can include spendthrift protections for beneficiaries when you have a living trust, so their creditors would not be able to touch their inheritance.
It is also possible to dictate terms with regard to the nature of the asset distributions. For example, you can allow for a certain amount to be distributed each month. You can subsequently provide larger lump sum distributions when the beneficiaries reach certain age thresholds.
In addition to a living trust, there are other types of trusts that can be utilized. When you do not explore your options, you will probably wind up settling for an approach that is less than ideal.
Overlooking Incapacity Planning
One of the major mistakes that people make is a failure to address the eventualities of aging. Your life expectancy is at least 85 years after you reach the age of 67 depending on your gender. Over 30 percent of the elderly contract Alzheimer’s disease according to the Alzheimer’s Association.
This is not the only cause of dementia, and dementia is not the only form of incapacity. To account for this possibility, your estate plan should include certain documents. A living will can be utilized to state your life-support preferences. You should add a durable power of attorney to designate an agent that will be empowered to make health care decisions on your behalf that are not related to life support.
To account for financial matters, you can add a durable power of attorney for property. If you have a living trust, you would be the trustee while you are alive and well. When you establish the trust declaration, you can name a disability trustee to assume the role if it becomes necessary.
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You can see the dates if you head over to our special events page, follow the instructions to register so we can reserve your spot.
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We are here to help if you are ready to work with a Burbank, CA estate planning attorney to put a custom crafted plan in place. You can send us a message through our contact page to request a consultation appointment, and we can be reached by phone at 818-937-2335.