Estate planning is an ongoing process – when life changes, so should your plan. Many believe that once estate planning documents, such as a will, living trust or a durable power of attorney, are executed, their estate plan is complete. This is not the case – in fact, there are several mistakes that people tend to make in estate planning:
1. Failing to keep documents up to date.
Changes such as marriage, divorce or the death of a spouse, beneficiary or executor should trigger a review of your estate planning documents. All too often, spouses name each other in their documents, and when a spouse is lost, during the survivor’s period of grief, the documents are not updated.
2. Failing to properly use gifting strategies.
Making lifetime gifts can be a powerful estate planning tool – but it must be done properly and as part of a comprehensive estate plan. In addition to the tax advantages of gifting, you must consider other related isslues, such as whether or not gifting will affect your ability to qualify for Medi-Cal benefits to, among other things, pay fornursing home expenses.
3. Failing to update beneficiary designations.
Your retirement plan, life insurance policy, annuities and more have beneficiary designation forms. It is important to not only keep the primary beneficiaries updated, but you should have secondary or contingent beneficiaries named in the event that the primary beneficiary has died. Since these forms were often completed years prior when an account opened or a policy purchased, it’s an easy task to overlook. For many people with living trusts, naming the trust as the beneficiary may be a wise idea. An experienced and qualified estate planning attorney can assist you in making this decision.
4. Failing to plan for the expense of nursing homes or long term care.
With average nursing home expenses in California now topping $120,000 annually, it is essential to address these costs sooner rather than later. Not only is there long-term care insurance to consider, but Medi-Cal and VA benefits planning can help preserve family assets while qualifying for this needs-based benefit.
5. Not working with an expert.
All too often, people rely on second-hand advice or poorly qualified advisors to address their estate planning needs. You should have expert advice based on your specific needs and goals. Meeting with an experienced and qualified estate planning attorney can save you and your loved ones time, money and heartache in the future.
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