by Mike Bascom
Mistake #1: Relying on the government’s estate plan.
If you do not set up an estate plan, your property will be distributed according to the laws of the state where you live. The law may require the probate judge to give your property to someone other than the person(s) you would have chosen. For example, consider a family that has 2 minor children. The children could end up owning 2/3’s of the estate and the surviving spouse only 1/3.
Mistake #2: Relying on a will.
If your estate plan consists only of a will, your heirs will face many costly problems, such as probate and/or guardianship proceedings. While a will is a common estate planning tool, it may not be the best tool to use as the centerpiece of an estate plan.
Mistake #3: Relying on joint tenancy.
Almost everybody owns their home and bank accounts in joint tenancy. Yet joint tenancy often causes horrible legal nightmares. This is especially true in the blended or non-traditional family. You have many options that are better and safer than owning property in joint tenancy, and they come with much less risk.
Mistake #4: Relying on guardianships.
These court-supervised proceedings for addressing your physical or mental incapacity are costly, time-consuming and horribly burdensome. Why go through this when you can avoid it with a properly set up estate plan.
Mistake #5: Relying on the small estate exemption as your way of avoiding probate.
Many states allow residents to avoid probate if the value of their assets is less than a certain figure. Georgia has unusual exemptions. In Georgia, if a bank account has more than $10,000 in it, you must probate the bank account. However, a car, regardless of its value, is easy to handle. The surviving spouse or children simply need the death certificate, a copy of the will, and title to the vehicle which they then take to the Department of Motor Vehicles, which will issue a new car title.
Mistake #6: Relying on a gifting program as your way of avoiding probate.
The law allows you to give away your property at a rate of $11,000 per person per year, without triggering a gift tax. A married couple can give $22,000 per year to anyone they choose without gift tax consequences. While this is an effective way to reduce the size of your estate, it has two down sides. First, you lose control of the assets you give away. Second, you may not be able to give away property as quickly as you need.
Mistake #7: Relying on skeleton, boiler-plate living trust documents to provide for your spouse and children.
When you create an estate plan, you have the opportunity to write specific instructions about how you want to provide for your surviving spouse and children. If you overlook this opportunity, your family will receive whatever care the one-size-fits-all form documents provide. That level of care is almost never as good as the care you would want your family to receive. This is especially true when planning for your disability.
Mistake #8: Relying on a form kit for your estate plan.
One size does not fit all because no two people are alike. Do you know anyone who has exactly the same property you have - and who wants their property to go to the same people as you? Your estate plan should be custom drafted to meet your specific needs. If you use a form kit, you're asking for problems. The only estate plan you can depend on is one that is custom prepared by a qualified attorney.
Mistake #9: Relying on the wrong attorney.
Most attorneys know very little about estate planning. And even estate planning attorneys may not want you to avoid probate if a large part of their earnings are from -probate. Make sure you hire an estate planning attorney who wants to help you achieve your goals.