Estate planning is meant to make the probate process easier. The documents you would use to plan your estate depend on many factors (although there are some basic forms that every estate plan should include, such as a Last Will and Testament). Because the planning is individualized, it’s important to be aware of the most common mistakes in estate planning so that you can avoid them.
You Die Without an Estate Plan
Estate planning isn’t an idea that necessarily gets people excited. Few people want to think about the fact that they won’t live forever. Yet, we never really know what the future holds. Dying without an estate plan can put your family into a difficult situation. Dying without a will in California means that the probate court will use the laws of the state to distribute your assets after your debts are paid. If you have minor children, the State of California may appoint a guardian that you didn’t want to raise your children. Without an Advanced Directive or Living Will, there could be questions about what you wanted during your last days if you’re unable to make your own medical decisions.
You Don’t Provide Accurate Information to Your Estate Planning Attorney
It’s important for your estate planning lawyer to have accurate information about your assets and your desires. This will help your attorney better educate you on how you can reduce your tax burden while ensuring that your wishes are followed in the distribution of your assets. Inaccurate information can include minor issues such as misspelled names or missing suffixes. It can also a more serious matter such as not providing an updated list of asset ownership. As your life changes, your estate plan should also change.
You Don’t Carefully Consider Guardians, Trustees, and the Executor
If you have a minor child or even an adult child with special needs who is still in your care, you must carefully consider who you will name as a guardian during the estate planning process. There are several reasons for this, but the main two are:
- If you’re leaving assets (including money) in a trust for your minor children or to care for your adult child with special needs, you need to choose someone who will properly manage those assets.
- Someone who is capable and willing to take care of the child or children.
You should also name an appropriate secondary guardian. This is someone who you want to take care of your child or children in the event that the primary guardian named cannot or will not agree to do so.
A Trustee is someone who has the important job of managing a trust. The trust could be for your children, your spouse, your pets, or the charity of your choice. This person is known as a fiduciary. Under the law, they must be responsible for the assets of the trust and how they are handled. Mismanagement is a very real concern. You can account for this risk by carefully considering and naming the right Trustee. You can even decide to use a professional, such as an attorney, to act as Trustee.
An Executor is someone who is named to carry out your wishes after your death. They open the probate matter with the court, inform creditors of your death, pay your debts, and make sure that your wishes are carried out according to your will. This person will have to report to the probate court. However, you want to choose someone who is willing and able to handle this important job. Your spouse may not be fully prepared to handle this task because of their grief. You’ll want to name both a primary Executor and a back-up Executor. The back-up would be responsible if your named primary is unable or unwilling to fulfill their duties. If you do not name an Executor, the court will make that decision.
Failing to Review Your Estate Plan
Estate planning isn’t something that you do just one time and forget about it. You must review your estate plan on a regular basis to make sure that it addresses the changes in your life. This includes but should not be limited to marriage, divorce, the birth of a child, an adoption, a spouse or child who will need permanent care, and wanting to maintain philanthropic activities after your death.
While this isn’t a complete list of estate planning mistakes to avoid, it does address some of the most common ones. Talk with a qualified California estate planning lawyer to ensure that your family is protected.