Common Mistakes to Avoid in Estate Planning PART 2

This is the second post in a two-part series on the most common estate planning mistakes. For part one, please click here.

Mistake #4: Making poor choices in nominating a trustee, executor, or other agents

Serving as the trustee of a trust, an executor of a will, an attorney-in-fact over finances, or a health care agent are serious responsibilities which require notable time and effort. Particularly with regard to financial agents and executors/trustees, the person you nominate must be someone you inherently trust not only to follow your wishes, but also to make sound financial decisions.

Seriously consider nominating a trust protector if you are concerned about the ability of your trustee to follow the terms of the trust without being manipulated by a beneficiary. Consider nominating one family member to handle financial affairs and another to handle healthcare affairs so that neither feels slighted. Nominating relatives or friend to act jointly as Trustee and/or Agent of the estate plan is concerning for many reasons, but mainly because this opens your estate up to the possibility of litigation or contest.

If you aren’t comfortable with any of your loved ones acting on your behalf, consider nominating a professional fiduciary to act as trustee. If there is a particular person you do not want to make decisions, say so. If one person should have absolute authority, say so.

Finally, if you are comfortable doing so, discuss your estate plan with your family and your nominated executor/trustee, including why you nominated certain individuals over others.

Mistake #5: Failing to review and update your estate plan

Estate planning is not a one-time event: it’s an active process that you reflect on and update over your lifetime. Your individual wishes, needs, and assets will inevitably change. Your family will grow, and tax and estate laws may be modified. While we can never know exactly what the future will look like, one thing we can do to ensure that our interests and loved ones are always protected is to create an estate plan that changes with us.

If you have an estate plan, you should consider reviewing your documents every three to five years to guarantee your wishes are properly expressed and match what you currently want or believe.

For more information on best review practices, please consider reading a few of our past blog posts here and here.

Mistake #6: Not creating an appropriate estate plan in the first place

Contrary to what many people think, even if you have a will, your property will pass through the probate court at your death. The only way to avoid probate in California is with a living trust.

Without a living trust, your property and bank accounts, personal property and even your retirement accounts will be appraised and distributed by a probate judge according to the rules of distribution of the probate code. That means that your estate may not be distributed to the people you wanted it to; or in the method you would have wanted it to. In addition, if your family hires a probate attorney, the attorney’s fees will be determined based on a percentage of your overall estate. This can often result in a windfall to a probate attorney–at a huge detriment to the family.

The average probate process takes one year but could easily last longer with contest, creditor issues, or procedural mistakes. In California, probate attorney’s fees are calculated based on the gross appraised value of the probate estate. California Probate courts handle guardianships, conservatorships and the administration of estates (distributing property to the family of someone who has passed away). 

If you find yourself concerned or have questions about any of the scenarios mentioned above as they may apply to your family, consider meeting with an experienced estate planning attorney who can advise you on how to best avoid these mistakes and plan for your future with confidence.

Happy Planning!

B.B.

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship. Brittany Britton is licensed to practice law in the state of California only.

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