Internet abounds with articles on estate planning including lists of common mistakes, but they often talk about the same things. Here are some things to consider, but that are just as important.
Plan for older children, not just minors.
Most parents think of a tutor for young children, but few anticipate the inexperience and lack of judgment of adult children. Consider what happens when a child reaches the age of 18 years old. The child is now an adult. Without proper planning, he will have the right to receive all of his inheritance without any conditions. How many 18-year-olds can handle this? What about even older adult children? Do yours have the age and maturity to manage money responsibly? Would it be better to let someone more able to control the inheritance, leaving your children (or grandchildren) time to learn how to handle it? What about loved ones struggling with particular problems, such as addiction, divorce, physical or mental limitations? All of these circumstances may warrant special protection. None of this can happen without proper planning.
Do not forget the objectives. Have you considered including a "stimulant" in your plan to encourage the achievements of loved ones? Do not just plan your college expenses – consider making a significant cash donation to the young person as soon as you get that first degree. Why not allocate a certain amount to a charity, while allowing descendants to select recipients? This can be a great way to teach philanthropy.
Do not assume that your will always controls.
Many people mistakenly assume that their will must be respected, "whatever happens". This is not true with respect to the assets that are titled , such as real estate and financial accounts. If another person is on the title with you, that person might be entitled to the entire property when you die. If that is the case, your will is ignored. The same goes for assets with a beneficiary designation, such as life insurance or retirement accounts. Take the case of the woman whose adult daughter had a car accident, leaving her with long-term injuries and high medical bills. The biggest asset of the woman was his life insurance policy. The woman's will says to give the girl all her assets, but the beneficiary designation of life insurance says to give insurance to a charity. The beneficiary designation of life insurance is the one that has been followed. The will of the woman makes no difference.
Do not forget that it may be necessary to have money to carry out your plan.
"How are you going to pay for this?" People plan to pass on their property to their deaths, but forget this simple question. They order that a house be kept for use as a family vacation home, but leave nothing to pay for the mortgage, taxes, insurance or maintenance. They forget that their debts and expenses must be paid upon their death, fail to leave money to cover them and do not ask them what should be sold to pay for them. Other common money needs include funeral arrangements, family business management, dependent support, payment of taxes, funeral payments and payment of probate. You need to plan for liquidity and, if you have a special asset that you do not want to sell unless it is absolutely necessary, you have to indicate it in your plan, otherwise you risk it being auctioned off!
Do not hide your information.
The information is the key! The items you keep in your head will not help if you are disabled or have died. Do you use the Internet for billing and account statements? How will your loved ones know what your bills are, they never come in the mail? How can they access your email accounts and online accounts if they do not know the web addresses and passwords? Your Internet accounts must be listed with clear instructions.
Putting your will or your trust "in a safe place" can be just as problematic. If no one can find them, nobody can follow them. In one case, a woman had sewn her will at the bottom of the living room curtain. The discovery was made purely by chance. A "safe" place to keep your will is in a safe in the bank or in a fireproof safe at home, a copy must be accompanied by your lawyer and you must tell at least one of your relatives where to find the # 39; original. .