Estate Planning No-No’s! - Part One

INTRO: It has been a while since I have written about common mistakes people make in the estate planning arena. I think it’s instructive to highlight a number of important “no-no’s” and to comment on positive steps that can be taken to avoid them.

1. FAILING TO PLAN AT ALL! The most critical estate planning error is not to do any! Every adult should establish at least a Durable Power of Attorney, Advance Health Care Directive and Will; and many people would also benefit from a Revocable Living Trust. These are documents that serve very important purposes and will inevitably be needed at some point – we usually don’t know just quite when or how. So, doesn’t it make sense to have them in place, just in case…?

2. NOT OBTAINING PROPER LEGAL ADVICE. Time and again, I have consulted with people who are struggling to administer a trust or estate because the decedent (for whose trust or probate estate they are administering) failed to obtain sound legal advice about the estate planning documents he or she signed. “Canned” documents prepared by an inexperienced attorney, prepared by a paralegal at a document preparation service or purchased online, are of very little value without good legal advice about their terms, alternatives and implications. You know the adage, “you get what you pay for”. In fact, the potential consequences of the lack of expert advice – unlawful, ineffective or impractical documents – can result in inconvenience and administration fees and costs that are many multiples of what it would have cost to obtain good, professional advice in the first place.

3. NEGLECTING TO FULLY FUND YOUR LIVING TRUST. It is not uncommon for people to establish a living trust, but not adequately “fund” it (formally transfer title of assets into the trust). Having a living trust and not funding it with substantially all of your assets leaves your estate vulnerable to an otherwise avoidable probate and to having these non-trust assets inherited by people you wouldn’t want to receive them and/or at a time or manner you would not wish. Fortunately, it’s relatively easy to transfer assets into your trust with appropriate instructions and forms.

PART TWO: Rob explains more about the common mistakes people make in the estate planning arena in Estate Planning No-No’s! – Part Two.

This article is intended to provide information of a general nature, and should not be relied upon as legal, tax, financial and/or business advice. Readers should obtain and rely upon specific advice only from their own qualified professional advisors. This communication is not intended or written to be used, for the purpose of: i) avoiding penalties under the Internal Revenue Code; or ii) promoting, marketing, or recommending to another party any matters addressed herein.

ESTATE & TRUST ADMINISTRATION: Need to find an experienced estate & trust administrator in Walnut Creek CA? Contact Robert Silverman at 925-705-4474 for legal advice on a Revocable Living Trust, “Summary” Estate Administration, Trust/Estate Beneficiary Representation and Will & Trust Disputes.