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Avoiding Common Errors In Estate Plans

Any mistake or ambiguity in your estate plan can result in catastrophe.  Significant, yet simple errors can negatively affect not only the value of your estate, but when your estate is distributed and how your assets are distributed to your loved ones. It is vital to ensure your plan is effective and kept up to date as your “estate” situation usually changes with time.

Mr. Lewis can help you design everything from the straight forward estate plan to the complex estate plan.  Every client has specific, yet different, estate planning needs. Our Sacramento firm is familiar with the both the common errors and the uncommon errors in estate planning.  We are dedicated to helping Californians avoid errors.  By designing flexible, yet impenetrable estate plans, we serve our clients and help them deliver their legacies in the manner they desire.

10 Estate Planning Mistakes

  1. Procrastination — Life circumstances and death are expected, but unpredictable. By putting off the establishment or review of your estate plan “until tomorrow,” you are playing with fire.  The worst thing you can do to your loved ones is to die intestate (without a will).  By dying intestate, you let the government plan your estate.  Unless your experience with the government is different from ours, their planning will be no better than other government programs.  Don’t let your loved ones get dragged into probate court.  In probate, you are basically hiring a lawyer to sue your estate so that the probate court can publicly humiliate your family and your loved ones.  This is not an estate plan, it’s a nightmare.
  2. Doing it yourself — It may seem cost-effective to create your own estate plan using online resources, but the process is more complex than you think.  Look at the warnings the online site make your sign when you use the site: “This is not a substitute for meeting with a lawyer.”  Then they offer you a meeting with their lawyers.  If they were confident in the online document, why would they offer you the services of their lawyers?  Your best option is it to seek the advice and guidance from an experienced, litigation tested estate planning lawyer.  Whether you choose us or another experienced lawyer, choose experience.
  3. Not seeing the big picture — People rarely see their own situation from multiple angles, and they may not be aware of all of the “what ifs” that need to be considered. It is important for you and your family to be fully prepared for whatever situation may come to be.  Even lawyers hire other lawyers to do their estate plans.
  4. Missing the important details — As with any legal document, it is vital to design the specifics carefully in order to avoid unintended loopholes or ambiguities that might wreak havoc on the administration of your estate.
  5. Giving money outright to heirs — Without a sophisticated plan of disbursement, your loved one’s beneficial interest may be unwisely spent — or be collected by creditors. Instead, consider designing a trust to distribute assets to children or other family members in a specific manner at the correct time.  Do not make the mistake of putting a substantial amount of money in the hands of someone who has no idea how to handle money.  They will not miraculously become a dutiful steward of finances.  The more likely outcome: the purchase of new expensive car and an investment in cousin Jim’s next big business idea.
  6. Failing to update documents — It is vital to check all asset transferring documents regularly to ensure that beneficiary designations, titles on assets and estate planning documents have been properly updated. This is particularly important if you divorce, remarry or add to your family through birth, adoption or other means.
  7. Appointing a loved one as trustee — Although this may seem like a wise choice, naming someone you love to be the trustee of your estate makes him or her personally liable for trustee errors and negligence.  Believe us when we tell you the laws in California are not simple for trustees.  And whether you are a bank or a daughter, you must follow those laws.  This alone puts his or her personal finances at risk. Instead, find a “professional trustee” to handle this role.
  8. Gifting away too many assets — It may be tempting to give away assets in order to enjoy tax breaks, but without proper advice you run the risk of giving away too much; outliving your money.  Once you give it away, it is unlikely you can get it back.  Even if someone wants to give it back to you, people have a tendency to spend money when they receive it as a gift.  Once it is spent, it is gone. Charitable giving is also great, but not when you give away so much you are unable to maintain a comfortable standard of living for your golden years.
  9. Forgetting about pets — How will your beloved pets be cared for if you die or become incapacitated?  Don’t rely on someone to take care of your little fury friends.  You can establish a pet trust to provide for your animal companions.
  10. Not considering your digital assets — It is important to provide a list of your user names and passwords for your online accounts and all other like assets. That way, trustees or the appropriate family members are able to access this information and avoid additional hassle.  We have had to violate many a safe because the combination left with the owner.

Trust Us With Your Estate

As your attorney, Mr. Lewis will work diligently on your estate plan, helping you to avoid both the common and the uncommon mistake. The mistakes listed above are just the beginning pitfalls.  We will work to ensure everything of value is accounted for in your documentation and addressed in your estate plan. This includes real estate, retirement plans, stocks and bonds, cash accounts, coin collections, gun collections and other parts of your legacy.  Let us help you design the estate plan that will make sure good things happen to your family.

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