Why work hard to build wealth only at the end your wishes to give to your family is snatched and your family is left with much left than you expected? From wills to trusts, protect your loved ones by avoiding these 4 common estate-planning mistakes:
1) Drafting Your Own Estate-Planning Documents
There's nothing wrong with saving a few bucks and skipping an expert by drafting your own estate-planning documents. You can find templates and tons of resources for basic wills online and in bookstores. Just be sure to invest in someone to review your final documents to be sure everything is in order.
About ninety percent of the online estate planning documents don't do what people think. People use online documents, documents out of estate-planning books or documents borrowed from friends. But they mess up their estate plan because they don't understand the legal and technical aspects of the documents.
There has been cases where a client would sign the deed which transferred his house to a trust but did not create the trust properly, which did not go into effect. There has been some clients that can be confused over the term "beneficiary" which could cause immediate transfer of all the property to their and also required to pay them annual income, which could result in leaving his wife out in the cold.
2) Failing to tie your business to your estate plan.
If you own a business, include it in your estate plan. Sometimes parents don't want to talk to their kids about their business and just leave the business to the kids. That could be huge mistake.
A typical problem is how to equally provide for children who possibly work for the family business and for those who don't. The parents sometimes stick with simple wills and they die within five months later leaving the children are left fighting over how much income they would be getting from the business.
3) Leaving Lump Sums.
If you have money to leave behind make sure it is in a trust rather than cash. For example there was an article on a father who left $250,000 to his heroin-addicted son, who ended up with nothing six months later.
With a trust, you transfer the property to a trustee, who is bound by a trust agreement. With the trust agreement it stipulates how you want the property to be distributed. So instead of just giving the beneficiary, the trustee holds your property and distributes it out per your instructions. It's just an added layer of protection.
4) Neglecting to update your estate plan.
There are times where the law or your family changes, it would be in your best interest to revisit your estate plan. For example there could be a couple who had an out-of-date estate plan who done their wills for their children 20 years ago. Legally the documents were valid, but they would have not been worth nothing at all. The couple did not need and guardians for their children, because their children were adults and had children of their own. Their assets were different, and the executor passed away many years earlier.
At Atlantis Law we have expert attorney's who will help you avoid these common mistakes in estate planning. We want you to have the piece of mind of knowing that your assets will be distributed the right way and make sure all your documents are drafted the right way. We want your loved ones to be protected.
Schedule your free consultation today!