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Many people are procrastinators and afraid to face their own mortality. They often fail to properly plan for death, disability and retirement. Clients often tell me that if they knew estate planning was so easy, that they would have done it years ago.
Estate planning is often neither complicated nor costly. However, failure to plan is very costly, complicated and stressful.
Over the past thirty-eight years of practicing Elder and Estate Law, I have observed my clients make these common estate planning and Medicaid planning mistakes:
1. Believing that you are too young to need a health care proxy or power of attorney. The two famous living will cases involved women in their 20s.
2. Not safekeeping your will, power of attorney, living will, health care proxy, burial designation form and living trust documents where they are accessible when needed.
3. Believing that you are too poor to need a will. Even if you have no assets now, your estate could be very substantial if you were involved in an accident.
4. Not updating your will, power of attorney, health care proxy and life insurance beneficiaries after a divorce.
5. Buying real estate with a domestic partner or child without a co-tenancy agreement.
6. Selling your home in which you have a life estate while you are in a nursing home.
7. Appointing the wrong person as your power of attorney, executor, children’s guardian or trustee.
8. Owning a business or rental property without forming a limited liability company or corporation for business succession and asset preservation.
9. Not pre-planning your funeral.
10. Not signing a prenuptial agreement or living trust before a second marriage.
11. Not providing for your pets with testamentary trusts.
12. Adding one child to your bank account as a joint owner if you do not intend for that child to receive the entire account upon death.
13. Not having gift-giving authority in your power of attorney.
14. Not taking advantage of the Medicaid exemptions.
15. Creating a living trust, but not funding it.
16. Preparing wills, powers of attorney, health care proxies, living trusts, living wills and Medicaid applications yourself without an elder law or estate planning attorney.
17. Not utilizing life insurance correctly by not having enough coverage, not updating beneficiaries, not using life insurance trusts; not realizing that it is subject to estate taxes; and not realizing that it is not governed by provisions in your will.
18. Not making gifts to avoid estate tax and Medicaid.
19. Not executing a Burial Designation Form.
20. Not including digital asset provisions in your will and power of attorney.
The above topics will be explained in greater detail in future blogs.
Each particular person’s estate planning needs are different. Consult with an attorney, tax advisor and investment advisor now to obtain advice on what is best for your particular situation.
The 20 Most Common Estate Planning Mistakes blog can be originally viewed on the website http://www.nyelderlegalsurvival.com
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