Will You Avoid These Estate Planning Mistakes
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Will You Avoid These Estate Planning Mistakes

Will You Avoid These Estate Planning Mistakes? Too many wealthy households commit these common
blunders. Many people plan their estates diligently,
with input from legal, tax, and financial professionals. Others plan earnestly but make mistakes that
can potentially affect both the transfer and destiny of family wealth. Here are some common and not-so-common errors
to avoid. Doing it all yourself. While you could write your own will or create
a will, it can be risky to do so. Sometimes simplicity has a price. Look at the example of Aretha Franklin. The “Queen of Soul’s” estate, valued
at $80 million, may be divided under a handwritten or “holographic” will. Her wills were discovered among her personal
effects. Provided that the will can be authenticated,
it will be probated under Michigan law, but such un-witnessed documents are not necessarily
legally binding. Failing to update your will or trust after
a life event. Relatively few estate plans are reviewed over
time. Any major life event should prompt you to
review your will, trust, or other estate planning documents. So should a major life event that affects
one of your beneficiaries. Appointing a co-trustee. Trust administration is not for everyone. Some people lack the interest, the time, or
the understanding it requires, and others balk at the responsibility and
potential liability involved. A co-trustee also introduces the potential
for conflict. Being too vague with your heirs about your
estate plan. While you may not want to explicitly reveal
who will get what prior to your passing, your heirs should understand the purpose and
intentions at the heart of your estate planning. If you want to distribute more of your wealth
to one child than another, write a letter to be presented after your death that explains
your reasoning. Make a list of which heirs will receive collectibles
or heirlooms. If your family has some issues, this may go
a long way toward reducing squabbles as well as the possibility of legal costs
eating up some of this-or-that heir’s inheritance. Leaving a trust unfunded (or underfunded). Through a simple, one-sentence title change,
a married couple can fund a revocable trust with their primary residence. As an example, if a couple re-titles their
home from “Heather and Michael Smith, Joint Tenants with Rights of Survivorship” to “Heather and Michael Smith, Trustees
of the Smith Revocable Trust dated (month)(day), (year).” They are free to re-title myriad of other
assets in the trust’s name. Ignoring a caregiver with ulterior motives. Very few people consider this possibility
when creating a will or trust, but it does happen. A caregiver harboring a hidden agenda may
exploit a loved one to the point where they revise estate planning documents for
the caregiver’s financial benefit. The best estate plans are clear in their language,
clear in their intentions, and updated as life events demand. They are overseen through the years with care
and scrutiny, reflecting the magnitude of the transfer of significant wealth.

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