In this video, attorney Aaron Miller discusses the five most common estate planning mistakes.
Hi I’m Aaron Miller attorney at law, and today we are going to talk about the 5 most common Estate Planning Mistakes People Make
When it comes to basic estate planning, these are the most things I run into the most. Let’s talk about what they are and how you can avoid them when making or updating your estate plan.
Mistake #1 – Failing to Make an Estate Plan
When it comes to basic estate planning, the easiest thing to do for people is to avoid it. The typical reasons why range from fear of death, to a belief that it is too expensive, to complicated family situations. Needless to say without an estate plan, you’ll be leaving your loved ones in the dark, and they can end up spending a ton of money figuring out what to do for you if you become disabled and what to do for themselves after you die. Avoid this #1 mistake. Begin your planning early, while you still have your wits about you.
Mistake #2 – Forgetting About the Little Things
I find that many people overlook making a plan for their personal effects, including jewelry, art work, and collectibles. They simply assume that their family will be able to agree on how to divide it all up. But in my experience, these things are what people argue over the most. Recently I visited with a friend who was involved in an estate where two sisters fought for over a year on who was to receive the family picture albums left in their mom’s house. They ended up spending over $2,000 on attorney’s fees fighting over 2 photo albums that had a simple resolution, had they stopped to think about duplicating the originals. Don’t let this planning mistake happen to you and your loved ones. Ask what everyone wants and then make a simple but smart plan for your “stuff.”
Mistake #3 – Failing to Fund Your Revocable Living Trust
I see this mistake over and over again – people who don’t understand the importance of properly funding their living trust. If you’ve taken the time and invested good money on creating a solid foundational estate plan, then don’t stop there, or your assets will0still end up in a court-supervised guardianship if you become disabled, and they’ll still have to go through probate after you pass away. Instead, take the time to have your attorney assist you in the funding process of your trust and update the beneficiaries of your life insurance and retirement accounts. Otherwise, plan will only be worth the paper it’s written on.
Mistake #4 – Choosing the Wrong Fiduciaries
When it comes to basic estate planning, this is another common mistake I see over and over again – people who choose the wrong people or institutions to serve as their Personal Representatives, Successor Trustees, Power of Attorney Agents, and/or Health Care Agents. In fact, choosing the right fiduciaries for your estate plan is just as important as creating the plan in the first place, since your plan won’t work as you intended if your fiduciaries aren’t capable of doing the jobs you’ve given to them. Avoid this estate planning mistake by working with your estate planning attorney to choose the right people or institutions for the right jobs.
Mistake #5 – Making Your Estate Plan Too Complicated
When it comes to basic estate planning, some people go over the top and make their plan so complicated that it will take several lawyers, accountants and a judge, not to mention thousands of dollars, to unscramble the plan and make it work. An overly complex estate plan will not only frustrate your loved ones, but it will also tie the hands of your fiduciaries since they won’t be able to do their jobs without seeking expensive professional advice. Avoid this mistake by working with your estate planning attorney to create a practical and common sense estate plan that will work as you intended but without the need for advice from multiple attorneys and accountants.
Well those are the top 5 mistakes people make with their estate plan. You can find more videos at aaronmillerlaw.com/resources/videos
This is Aaron Miller and thank you for watching.