The Most Common Estate Planning Mistakes I See (Part II)
Last week, I talked about some common estate planning mistakes I see that can end up being costly, heartbreaking, and don’t fulfill the wishes of the deceased. Here are a few more to be on the lookout for:
– Improperly titled assets – Most people are busy living life and don’t think twice about whether their home or other assets are properly titled in their name. It usually doesn’t become a problem until the individual dies or the property is sold. However, I once had a very sad case with a home that was improperly titled between a husband and a wife, and when the husband suddenly died at a very young age, the wife was left with a lot of extra legal hassle that she didn’t need in her time of grief. As part of the estate planning process, you may want to consider asking your attorney to look up the deed to your home if you aren’t sure.
– Failing to plan for long-term care – This isn’t an estate planning mistake per se, but it can affect the deceased’s estate a great deal. The cost of a nursing home in the metro Atlanta area averages between $4,000 and $5,000 per month. Medicare will only pay for a few weeks following a hospitalization, and Medicaid won’t pay until most other assets are spent. Therefore, it’s great (if you can afford it) to purchase long-term care insurance, which can help cover those costs and avoid eating up every asset you spent your entire life working for. There are a lot of ways the insurance can be purchased to make it more affordable for individuals and couples. If you have any questions about long-term care insurance, give me a call.
– Failing to properly sign and notarize the documents – Georgia law requires that wills have two witnesses and a notary. Older wills may not have that notarization on it, which in some cases isn’t a problem, but it can be. It’s easy when signing your documents to miss a signature. Make sure your documents have all the required signatures, or you may have a problem.
– Failing to let anyone know if the documents have prepared and if so, where they are – Many clients are squeamish about talking about death or estate planning with their loved ones. However, it has to be done. At a minimum, let a close friend or loved one know where your documents are, or the name of the attorney who prepared them. I have been contacted before by family members asking if I prepared their loved one’s will. I have also heard some stories about important documents being left in whacky places and not being found when needed. At a time of grief, everything can be a little easier if the documents are easily accessible.
– Failing to let loved ones know about financial affairs, debts, assets, life insurance policies, etc. – You know how hard it is to keep up with your own financial and legal affairs. Suppose you had to take over someone else’s, but you had no clue about their debts, what assets they owned, what life insurance policies they had, etc.? It’s important to leave written instructions about your financial affairs with your documents. You can use the Memo to My Loved Ones, available here as a guide.
– Failing to do any planning to avoid estate taxes – For the last couple of years, virtually all of my clients haven’t had to worry about estate taxes because the estate tax exemption was so high. If nothing changes, that won’t be true next year – we are facing both a low exemption and a high tax rate. If you have a large amount of assets and/or large life insurance policies, you may want to do some tax planning as part of your estate plan.
All of these mistakes can be avoided with proper planning, and I know it helps me to sleep easier at night knowing that if something were to happen to my husband and I that my three daughters will be protected. If you have any questions about estate planning, call me at 678-453-6490 to learn more.