Recent studies have shown that only slightly more than half of all Americans have a Will or Trust document in place to direct their estate after they pass away, and that the vast majority of those documents have not been updated in the last five years. Even worse, it’s been reported that most adult children are unaware if their parents even have an estate plan and would be unable to find estate their planning documents. These can lead to expensive consequences down the line and is one of the top mistakes people make regarding their estate plan. Milford estate planning lawyers have compiled this list of additional estate planning mistakes that you should be aware of, and hopefully avoid:
Family Squabbles
In a perfect world, there would be no sibling rivalry. However, it is a fact of life that families don’t always get along, and that could not be more painful or true than when a parent passes and disputes arise about the inheritance. A lot of times this is caused not by the distribution between the children, but from prior issues. Spite and childhood disputes do not end just because a parent passes. Milford estate planning lawyers often advise their clients to ensure their documents provide instructions to their executors about the distribution of assets and make it clear if a distribution is unequal that they had a reason why. Parents can also have a conversation with their children about their distribution plans. If the parent is uncomfortable having this type of conversation, a letter written to each beneficiary to be read upon the parent’s passing can serve the same purpose.
Unaccounted Taxes
Milford estate planning lawyers often see this issue come up with estates that do not leave enough liquid assets to pay estate taxes, court fees, administrative expenses, and other debts of the decedent, forcing the beneficiaries to sell property such as homes or other assets just to pay off estate tax debt. Careful planning with an estate planning lawyer can help you avoid these kinds of issues, and makes it worthwhile for you to meet with your estate planning attorney on a regular basis to learn about changes in the estate tax laws for your financial situation so that you can update your estate plan accordingly.
Out-of-Date Estate Plan
Unexpected changes happen in life, such as a falling out with a family member, a divorce, or a new marriage. However, legal issues arise when these changes are not accounted for in your legal documents. For example, if you were to disinherit a child but do not change your Last Will and Testament to reflect this – well, that child won’t legally be disinherited. You can also flip that around and have a situation where you and your child have reconnected after a falling out, but if you never added that child back into your estate plan, they may not receive that inheritance you decided to give them after all. Divorce and marriage can also wreak havoc on out-of-date estate plans, so it is important that you speak to an estate planning attorney after any major life events.
If you have questions about creating an estate plan, or you would like to speak with one of our attorneys about reviewing your existing plan to ensure it still meets your needs, please contact us at (203) 877-7511 to set up a consultation.
