Common Estate Planning Mistakes – “You Don’t Know What You Don’t Know”

Adam Doll | Hopkins & Huebner, P.C. | Adel Office

We’ve probably all heard the Benjamin Franklin expression, “If you fail to plan, you are planning to fail.”  Failing to have an estate plan at all is the biggest estate planning mistake one can make and is the equivalent of “letting the chips fall where they may.”  If you do want some control over how your estate is handled, the first hurdle is developing an estate plan with a qualified attorney.  Here are a few specific mistakes that are made:

• Failure to Plan for Minor Beneficiaries.  It is always sensible to plan for minors getting assets through an estate.  Whether the minors are your kids or grandkids that may receive assets, a testamentary trust avoids headaches if set up within your will.  A testamentary trust allows you to name a trustee to manage, invest and spend money for a minor trust beneficiary until that minor beneficiary is old enough to be responsible enough to handle the assets.  Failing to have a testamentary trust can result in the necessity of a legal conservatorship being set up, which is much more burdensome and costly than a trust.
• Failure to Fund Trusts.  A revocable trust can be an effective estate planning tool.  The main benefit of having a revocable trust is avoiding the probate process.  But simply executing a revocable trust is only part of the equation, as that trust is useless without proper funding.  This means all titled assets (with the certain exceptions) need to be re-titled into the trust name.  Failure to properly fund a revocable trust can lead to having to administer both an estate and a trust at your death.
• Failure to have a Living Will.  A living will is a statement signed by you on how you desire your end of days to be.  In general, a living will states that if you have an incurable condition which will result in death in a short period of time, you request no life-sustaining procedures that prolong the dying process and are not necessary to comfort or freedom from pain.  Having a living will can ease the burden and stress on your family members because you are making this decision for them.

The above three mistakes are but a small sample of many missteps that people can make in estate planning.  Having a trusted estate planning attorney in your corner is beneficial because “you don’t know what you don’t know.”