Mistake #1: Not following through. 

Great estate planning is anything but set-it-and-forget-it. Implement and then regularly update the plan. You should leave the estate planner’s office with a checklist of actions you need to take. (Then, follow the checklist!) Update and revise as needed. Like all plans, an estate plan isn’t fixed and unchangeable. It’s a continuing project that needs to be revised and fine-tuned over time. Plan on seeing your estate attorney at least every couple of years.

Mistake #2: Keeping your trust and will a secret.

BMO Wealth Management’s Estate Planning for Complex Family Dynamics report included a survey which found the following:

• 40% of parents never discussed their estate intentions with their children;

• Only 28% of adults said they knew details of their parents’ estate plans;

• 40% of those whose parents passed away believed their parents’ estate plans were unfair; and

• 25% of married adults said only their spouses know the locations of their estate planning documents.

Inform and prepare your heirs. Make them aware of the general value of your estate as well as assets and liabilities, and a general outline of the plan. Communicate your intentions and wishes for handling the wealth—and if they aren’t adequately financially literate, there are actions you can take to help them gain financial experience and acumen (or alternatively, put the wealth in trusts so others can make the big decisions). When heirs aren’t prepared, wealth often disappears. It can be wasted through poor spending decisions, bad investments, neglect and fraud. Your heirs need to know how to manage and spend the wealth before receiving it.

Mistake #3: Not funding a living trust. 

Trusts are set up to avoid probate and ensure assets are managed in cases of disability. But for those goals to be met, assets must be transferred to the trust. The deeds to the family home and other real estate must be put in the trust’s name. Automobiles must be registered with the trust as the owner. The same holds true for financial accounts and other assets. If those steps aren’t taken, the trust is empty; it owns no assets. All the assets are subject to probate.

Mistake #4: Not updating the plan, including powers of attorney.

Every estate plan should include powers of attorney. You need at least two, one for financial matters and one for medical care (often called an advance medical directive). You’re more likely to become disabled and need these documents before you need a trust and will as well as the rest of your estate plan. Unfortunately, many people don’t have either of these documents and others haven’t kept them up to date or given the details much thought. Be sure you have these documents and that they have been reviewed recently.

You should be in touch with your estate planner any time there’s a major life change in your family. This could include a birth, death, divorce, or marriage. Factors like changes in your net worth, the composition of your estate, job status and residence should also trigger a review of your plan. Of course, a change in your goals or in the law also means a meeting with your estate planner is in order. Are you looking to set up your estate plan in the Knoxville area? Volunteer Law Firm has the up-to-date knowledge and solid experience necessary to assist you in creating a trust and will you can feel good about. We take care of you—so you can take care of the ones you love! Contact us today via our website or learn more about the services we provide. 

The post Avoiding Common Trust and Will Mistakes appeared first on Volunteer Law Firm.

Take stock of your assets, both tangible and intangible.

• Tangible: Think things you can physically take possession of, like homes, vehicles, collectibles, land and other personal possessions.
• Intangible: These might include bank accounts, insurance policies, ownership of a business, retirement plans, stocks, bonds and mutual funds.

Once you inventory all these items, you need to estimate their value. Outside valuations (like recent appraisals and financial statements) will be helpful here. When you don’t have outside valuations, value your items based on how you’d expect your heirs to value them. This way, you can help ensure your possessions are distributed equally.

Account for your family’s future needs.

Consider how to protect your estate’s assets and your family when you’re no longer around. This may include naming a guardian for your children, documenting your wishes for their care and ensuring you have adequate life insurance.

Establish your directives.

You’ll want to have a few essential documents on-hand—namely:

• Durable power of attorney. This is a document that lets you appoint a trusted person, such as a family member, as your agent to make financial decisions on your behalf in the event that you are you are incapacitated or unable to do so for yourself.
• Will. It provides written instructions for how you want to distribute any assets held in your name and lets you appoint a guardian for minor children. Your will also names an executor responsible for carrying out those instructions. If you do not have a will, state law determines how your assets are distributed.
• Living will vs. health care proxy. A living will allows you to specify the type of future medical care and treatment you receive should you become incapacitated. A health care proxy grants another person the power to make those health decisions for you.
• Revocable trust. This one’s (relatively) optional and can be created with the assistance of a living trust attorney. A revocable trust is a written document of instructions for how you want your assets handled after you die. You, as the grantor or creator of the trust, can amend or terminate it at any time.

Review your beneficiaries.

Make sure the right people are benefiting from your estate planning. Check your retirement and insurance accounts’ beneficiary designations; they can outweigh what’s listed in awhile. Don’t leave any beneficiary sections blanks and name contingent, or backup, beneficiaries just in case.

Be up-to-date on your state’s estate tax laws.

Some states have estate taxes and some have inheritance taxes. This is where an estate attorney is going to come in handy. It’s our job to keep abreast of the applicable laws and regulations, so you can rest assured all your i’s are dotted and t’s are crossed. This is especially true if you’re working with a large or complex estate with special child care concerns, business issues or nonfamilial heirs. It’s also the case if you have any doubts about the process at all. A qualified trust lawyer will ensure you’re on the proper estate planning path, especially if you live in a state with its own estate or inheritance taxes. Estate planning is often a way to minimize estate and inheritance taxes.

Plan to reassess regularly.

Life is always changing—your estate plan should be flexible, too! Revisit your legacy planning when your circumstances change: in cases of marriage, divorce, childbirth, loss of a loved one, or even getting or losing a job. It’s worth reassessing even if your circumstances haven’t changed to be sure it’s in line with federal and state estate planning law.

Every individual’s estate planning needs are different, and the processes and laws for estate planning vary by state, which is why it is important to consult with your estate attorney for advice regarding your specific situation. It can be an intimidating and complex endeavor, but it’s beyond worthwhile. Thankfully, you don’t have to do it alone. Estate planning attorneys—like the expert trust attorneys at Volunteer Law Firm—are a great asset in ensuring you’ve got a plan in place you can feel good about.

The post Estate Planning: Starting With The Basics appeared first on Volunteer Law Firm.