Estate planning is a crucial endeavor that you should consider taking as soon as you acquire your fist asset, have a child, or step into adulthood. Unfortunately, many of us put it off for far too long, leaving ourselves and our families at risk of getting stuck in the court system in the event of an unexpected accident, illness, or injury.
Once you or your parents reach senior status, you can no longer pretend that estate planning is something you can put off. While planning for your incapacity and death can be scary, it’s even more frightening to think of the potential tragedies that can arise if you and your family don’t have the right planning in place. More and more, the media is highlighting the reality that without proper planning, the elderly can lose everything, even if they have family looking after them.
If you aren’t a senior yet yourself but have senior parents, get your own planning handled and then use that as a model to get your parents’ planning taken care of. Here are a few of the most common errors seniors make when it comes to estate planning and how to fix them:
Not creating advance medical directives
Two of the most important considerations you face when it comes to your medical needs are how you want your medical care handled in the event you become incapacitated and how you want medical care to be handled at the end of your life. Advance medical directives cover both of these situations, specifically a medical power of attorney and a living will. Medical power of attorney allows you to name the person you want to make healthcare decisions for you if you’re incapacitated and unable to make decisions yourself.
You also want to make sure you have a living will, which provides guidelines for how your medical care should be handled, if you become unable to voice your wishes. In addition to guidelines about how you want your medical care handled, your living will may also include instructions on the type of food you want to be fed to you as well as who should be able to visit you. In order to ensure that your health care wishes are properly handled—even in the most dire circumstances—creating these advance directives is a must.
Relying only on a will
Many people, particularly older folks, believe that a will is the only estate planning tool they need. While wills are definitely one key aspect of estate planning, they come with some serious limitations:
- Wills require your family to go through probate, which is open to the public and often expensive.
- Wills don’t offer you any protection if you become incapacitated and unable to make legal and financial decisions.
- Wills don’t cover jointly owned assets or those with beneficiary designations, such as life insurance policies.
- Wills don’t shield assets from your creditors or those of your heirs.
- Wills don’t provide protections or guidance for when and how your heirs take control of their inheritance.
Fortunately, all of the above areas can be effectively managed using a trust. However, some people are reluctant to use trusts because they’re unfamiliar with them and have been told a will is all they need. What’s more, because until recently trusts were primarily used by the ultra-wealthy, many believe they’re an extravagance they don’t need and can’t afford. Truthfully, people of all income levels and asset values can afford and benefit from trusts which provide numerous protections unavailable through wills.
If you’re relying solely on a will for estate planning, you’re missing out on many valuable safeguards for your assets, while also guaranteeing your family will have to go to court when you die. If you aren’t sure what you need, begin by contacting us for a Family Wealth Planning Session. Your Family Wealth Planning Session is custom designed to your assets, your family, and your wishes and serves to educate you on the best way to reach your objectives for the people you love.
Not keeping your plan current
Even when people prepare estate planning documents, all to often they put them into a drawer and forget about them. However, your estate plan is worthless if you don’t regularly update it when your assets, family situation, and/or the laws change. We recommend you review your plan annually to make sure it’s up to date and immediately amend it following events like divorce, deaths, births, and inheritances. With us as your Personal Family Lawyer®, we have built-in processes to ensure these updates are made right away.
When it comes to a trust, it’s not enough to simply list the assets you want it to cover. You have to transfer the legal title of certain assets—real estate, bank accounts, securities, brokerage accounts—to the trust, known as “funding” the trust, in order for them to be distributed properly.
Not pre-planning funeral arrangements
Although most people don’t want to think about their own funerals, pre-planning these services is a key facet of estate planning, especially for seniors. In addition to basic wishes, such as whether you prefer to be buried or cremated, you can choose what kind of memorial service you want—simple, elaborate, or maybe none at all. Are there songs you want played? Prayers or poems recited? Do you have a specific burial plot or a spot where you want your ashes scattered? Pre-planning these things can help relieve significant stress and sadness for your family, while ensuring your memory is honored exactly how you want.
If you’re already in your senior years, about to be, or have a parent who is, it’s critical that you take care of your estate planning immediately and avoid these common pitfalls. As your Personal Family Lawyer®, we’ll walk you step-by-step through the process, ensuring that you have everything in place to protect yourself, your assets, and your family. Contact us today to get started.
This article is a service of Levi Alexander, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.