Coronavirus is here with us, and in the quest to have an estate plan as fast as possible, many people are making many mistakes that ruin the chances of the family to survive when they are gone.
Remember that in your rush to have an estate plan in place, you might end up with a paper that might be worthless.
In as much as you need to do this right away, you need to make sure you have a comprehensive estate plan that will communicate your intentions and your plans for the future. Let us look at the mistakes you make when you come up with a plan in a rush.
Failure to Understand How Your Assets Will Be Distributed Upon death
For many people, they stick on the belief that the will determines how the assets get distributed when they die.For your information, most of the assets don’t go through the will.
An example is a joint tenancy asset that will pass directly to the surviving joint account holder.
Planning an Estate around a Few “Vital” Assets
We all have those few assets that we hold dear; those that we make sure are always a priority at all times. Unless you have valid reasons to do it, you don’t have to plan your estate just around a few assets.
Instead, come up with the right estate plan that encompasses all your assets equivocally.
Going Head-on With Probate
Probate represents the court procedure for proving that a testimony or a will is valid, then distributing the estate according to the will. Probate can help distribute the assets, but it is time consuming, expensive and can really frustrate you. The process can take Upto 5 percent of the value of the estate, and it can last up to 24 months to complete.
Additionally, the probate process opens up your file for scrutiny because it is a public issue. Any person can examine the file and get the contents that you wish to keep secret.
The probate system allows heirs to challenge the will. This means that a simple complaint to the probate judge can stop the probate process for up to a year, or even more.
To handle this, work with an estate planning lawyer to come up with a living trust then transfer the title of the assets into the trust.
Failure to Make Distinct Arrangements for Beneficiaries with Special needs
If you have a child that is abled differently, you need to try and leave them part of the estate using a specially-drafted trust that will secure their future and also make them eligible for public assistance.
If you don’t do this, then the child won’t get the necessary public assistance and will have to spend the entire inheritance on healthcare and other needs.
Failure to Handle the Irresponsible Child
You might have the perfect family, give your kids the right education but one of them always comes out as irresponsible. You will notice this trait in the person early enough and this will guide your decision to give them a part of your estate or to disinherit them.
You have to come up with a way to give them their rightful inheritance, but you have to put up special provisions to make sure they don’t squander it.
You can decide to come up with a trust that will give the child a part of the estate after every few years. You can also have conditions for the child to meet before they get their share, such as being alcohol-free for several months.Other parents have requested their kids to be tested for drugs for several years before they get their share of the estate.
The good thing is that as long as the inheritance is in a trust with special conditions attached, it can be protected from the grasp of the beneficiary.
Sloppy Drafting of your Documents
You might decide to come up with an estate plan as fast as you can, only to find that it lacks all the ingredients of a legally binding document. Make sure you draft the estate plan carefully to avoid any ambiguities that might arise that will lead to lawsuit after lawsuit.
Going for DIY
In your quest to make hay while the sun shines, you might decide to come up with a plan by yourself. Well, ask anyone that has attempted the same and they will tell you that it backfired. Make sure you enlist the services of a licensed estate planning attorney to help you come up with a legally binding document.
