Estate Planning can be a complicated process. One of the biggest mistakes people make is attempting to go at it alone. If you are hoping to avoid many of the errors made by others hoping to protect themselves and their families, having an experienced Missouri Estate Planning attorney working for you could be in your best interests.
With The Law Office of David S. Schleiffarth, LLC advising you, you can carefully craft well-thought-out Estate Plans and avoid many of the mistakes made by others like you.
What Is Estate Planning?
Estate Planning is an involved process that describes specific decisions that should be made on your behalf should you become incapable of making these decisions on your own through incapacitation or death.
Estate Planning includes a wide array of details, including the development of a Will, forming Trusts to avoid probate, assigning Powers of Attorney , and more. It is important to go over all of these elements step-by-step to ensure you understand every detail of your Estate Plans and do not leave anything out.
5 Rules Of Estate Planning
There are five key components and rules to Estate Planning. These include:
- Writing a Will – Your Will describes how your property and assets are distributed after you die. You must name an executor of your Will who is be responsible for carrying out these instructions. Your Will can also determine who is responsible for caring for your minor children if you become incapable of doing so for any reason. You can continue to update your well throughout your lifetime.
- Forming Trusts – There are multiple types of Trusts, including revocable Trusts and irrevocable Trusts. Revocable Trusts give you the opportunity to remain in control of the assets contained within the Trust and to make changes to the Trust at any time. Irrevocable Trusts contain assets that are no longer yours and cannot be changed unless the beneficiaries consent to the changes. You will need to assign a Trustee to handle the administration of your Trust.
- Assigning Powers of Attorney – You will need to assign a Financial Power of Attorney and Durable Power of Attorney. Your Financial Power of Attorney is responsible for handling your financial affairs should you become incapable of doing so. Your Durable Power of Attorney will make other important decisions, including your medical decisions, upon your passing.
- Writing Healthcare Directives – Your Healthcare Directive includes instructions for how your medical care should be handled if you become incapacitated or terminally ill. This includes whether any extraordinary measures should be taken to prolong your life, such as feeding tubes or life-support.
- Designating beneficiaries – When you craft Estate Plans, you’ll need to assign the beneficiaries that receive Trust distributions, assets, and property as outlined in your Will or other Estate Planning documents.
Common Estate Planning Mistakes to Avoid
There are many mistakes you could make along the way as you work through your Estate Plans. Here are some of the top mistakes you should avoid while Estate Planning:
Waiting To Formulate Estate Plans
One of the biggest mistakes you can make when Estate Planning is waiting to get started. The last thing you want to do is wind up suffering a severe injury or death, only to leave your family unsure of how to handle the administration of your estate. You also need to take steps to protect your estate from falling into intestate.
Forgetting To Include Family And Loved Ones
Your Estate Plans are in place to take care of your loved ones and family after your desk. However, if you forget to include specific family members or members have access to specific assets or other distributions, having well-crafted Estate Plans in place is essential. You might also want to name multiple beneficiaries, so a single recipient is not stuck with undue tax burdens or be at an increased risk for litigation.
Failing To Include Estate Plans For Incapacitation
Many people assume that Estate Planning is exclusively designed to describe how your estate will be handled when you pass away. However, there are specific provisions in Estate Planning that will apply when you become incapacitated or otherwise unable to make decisions on your own behalf. There must be the appropriate Power of Attorney and Healthcare Directives in place to ensure your wishes are carried out as you desire.
Lack Of Childcare Plans
Another common mistake made in Estate Planning is failure to make plans for your children’s care. Assigning a caretaker or guardian is essential if you have children who are minors. The last thing you want is for your children to wind up in the foster care system where even siblings can be separated.
You should also use your Estate Planning to protect your children financially. By setting up minor Trusts, you can help set your children up for future financial success.
Failure To Consider Debt And Taxes
If your Estate Plans do not include plans for paying off outstanding debts and covering taxes, you may be placing undue hardship on your family members and it is important to do everything possible to lower your state taxes and capitalize on federal exemptions this includes making gifts of up to $15,000 per spouse or more over a lifetime.
Failure To Keep Estate Plans Organized
It is important to ensure your lawyer, your beneficiaries, your spouse, and other necessary parties have copies of your Estate Plans. Be sure to keep them in an area that will be accessible upon your incapacitation or death. You should also be sure to destroy outdated copies and provide necessary parties with updated versions to avoid legal issues in the future.
Failure To Update Estate Plans
Do not forget to make updates to your Estate Plans as time goes on. When you or your family members go through major life changes, such as having children, marriage, or divorce, you may need to make changes to your Trusts, Wills, and Powers of Attorney.
Attempting To Craft Estate Plans Alone
You should never attempt to craft your Estate Plans alone. Having an Estate Planning attorney on your side can help to ensure you understand every detail of your Estate Plans and protect others from taking advantage of your Trust or the contents of your Will.
Failure To Plan For Long-Term Care Or Disability
Do not make the mistake of failing to plan for disability or long-term care. It is not unusual for the elderly who reside in nursing homes, assisted living facilities, or higher home healthcare providers to spend tens of thousands or hundreds of thousands of dollars annually.
It is important to take these factors into consideration as you formulate your Estate Plans. This way, the financial burden does not fall on your family.
Naming A Single Beneficiary
Although you may initially hope for your assets to be distributed to a single beneficiary, this may not always be a wise decision. In some instances, your beneficiary may reject the assets or die before they have the opportunity to access them. If this happens, you will want to have a contingent beneficiary in place who will be next in line to inherit your assets. In many cases, having multiple contingent beneficiaries may be well advised.
Failure To Include A Healthcare Proxy
Do not forget to include a healthcare proxy while formulating your Estate Plans. This is the individual who will be responsible for stepping in and making medical decisions on your behalf if you become unable to do so.
Healthcare Proxies are unique in that their role only exists while you are still living. The Healthcare Proxy role dissolves upon your passing. By ensuring your Healthcare Proxy is assigned and your Advance Healthcare Directives are carefully determined, you can take steps to ensure your medical decisions are well known so your wishes are carried out as desired if you become incapable of making them.
Failure To Make Final Arrangements
One of the biggest mistakes you can make in Estate Planning is failing to make your final arrangements. Do you want to be cremated or buried? Do you have a burial plot already purchased or a container you’d like to be placed in?
Going over these details with your beneficiaries and including them as part of your Estate Plans will be essential if you hope to have your wishes carried out upon your desk. Your end-of-life planning can help alleviate the financial burden on your family while they are in mourning.
Forgetting Digital Assets
It is important to consider your digital assets as part of your Estate Plan. These are growing in popularity and will likely continue to as the years go on. Make sure your Estate Plans lay out exactly how your digital asset should be distributed and handled upon your death. This will includes who will have access to your email or social media accounts, your banking accounts, and more.
Failure To Consider Important Charities
Remember to include gifting to charities as part of your Estate Plans. Be sure to select a charity of your choice as a beneficiary if there are particular charities that are meaningful to you. These are considered planned gifts and are often a part of some of the most carefully crafted Estate Plans.
Not Discussing Estate Plans With Beneficiaries And Agents
You should never keep your Estate Plans a secret. It is important that your agents, Trustees, and beneficiaries understand the details included in your Estate plans. You need to be sure that your Trustees and executors will handle their responsibilities as you hoped and prepare for the possibility that they may resign or die before they are able to take on their responsibilities.
Getting your Estate Plan details out in the open can also help to prevent any conflict with beneficiaries and Trustees and reduce the likelihood of litigation upon your death.
Failure To Include A Residuary Clause
Not including a Residuary Clause may be one of the worst mistakes you can make. These cover assets that are not gifted in Trusts or Wills. You can consider them a blanket clause that covers any assets that you might have forgotten to add to your Estate Plans or were unable to add prior to your death.
When To Start Estate Planning
There is never a wrong time to start Estate Planning. However, many people find that Estate Planning becomes more important when they start earning a considerable amount of money or having children. Although many people who are unmarried may not find Estate Plans necessary, it is important to plan ahead for how your affairs will be handled upon your passing, no matter what your marital status is.
You will want to be sure to make funeral and burial arrangements and ensure that beneficiaries have access to your financial accounts, bank accounts, personal, life insurance policy payouts, and your home. It may be in your best interests to start Estate Planning as soon as possible if you:
- We recently married
- Purchased a home
- Recently lost a loved one
- Recently adopted or had a child
- Have seen a significant increase in wealth
How To Start The Estate Planning Process in Missouri
When you are ready to start your Estate Planning process in Missouri, you can begin by retaining an Estate Planning lawyer to help guide you through the process. Once you have a lawyer on your side, you can expect to begin by:
- Taking an inventory of your assets and debts
- Crafting your Will and forming Trusts
- Assigning your Medical Power of Attorney and Financial Power of Attorney
- Designating beneficiaries and heirs
- Storing your Will and other estate documents in a safe place
Contact An Experienced Missouri Estate Planning Attorney For Help Today
Whether you are only just beginning the Estate Planning process or have already made some of the previously mentioned mistakes, once you have a dedicated Estate Planning attorney in Missouri working for you, you can correct any errors and get your Estate Plans back on track.
When you are ready to formulate Estate Plans that fit your goals for yourself and your family’s future, be sure to contact The Law Office of David S. Schleiffarth, LLC for an initial consultation. You can schedule yours as soon as today by filling out our quick contact form or calling our office.