5 Mistakes to Avoid in your Estate and Financial Planning


As an attorney who assists clients with Wills, Trusts, Probate, and Powers of Attorney, I see both good ideas and bad ones.  Here are a few of the really bad ones:

  1. Misspelling Names - whether it's your Will, Trust, Power of Attorney, Beneficiary, or Payable on Death forms, get the names correct.  Those coming behind you and wrapping up your affairs do not need to be explaining why you called "William" "Bobo".  Whether it's a financial group or a Trustee, matching a name on a document to a person should not be a challenge.  The solution, take a few extra minutes to confirm the names you are listing are the actual legal names of the people you wish to bless.
  2. Donating To The Government- You have a poor relative who is receiving Medicaid Long Term Care Services (they are in a state nursing home).  You would like to bless this relative upon your passing, so you list them in your Will, Beneficiary form, etc.  When you pass they now move from being poor, to a higher net worth category.  They could lose the services they have in place, or, every dime you give to them could wind up going to the Government.  Is that a good plan?  The solution, if you wish to bless a relative in a nursing home, talk to an attorney, accountant, or other professionals who understand how Medicaid (and other Government programs) works.  
  3. Giving Away More Than You Have - People often like the idea of "specific bequests", where you give a certain item to a certain relative.  Here's the issue - are you sure you are still going to have that item when you pass?  Some items get sold.  Some items simply waste away and have no value upon passing.  Some items (particularly jewelry) seem to vanish and never make it to the intended recipient.  The solution is to give these items away while you are living.  You get to see the joy of the gift as opposed to one of the results above. 
  4. The Easter Egg Hunt - Have you made plans for what's to happen upon either your incapacity or death?  If so, great!  But finding those documents should not be a mystery.  The solution is to make sure the relevant people know it and where they should find the documents.  Your Estate Planning should not be an Easter Egg Hunt.
  5. Doing It Yourself - I have had the opportunity to see some of the self-help material available.  Some of it is fine.  Some of it is abysmal.  Is your Estate so meaningless to you that you will trust the book or forms that you purchased?  The solution is to seek out a professional to assist you.  If you don't like the price, keep looking.  Planning can be affordable.

Thoughts?  Comments?  Additional suggestions that I missed? Feel free to chime in. 

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