Those who do not learn from history, are doomed to repeat it. Readers, please take this statement to heart. Many people spend more time planning for their vacation than they do for taking care of their family when they are gone. It is inevitable that we will all pass at some point. Make sure that your wishes are carried out in a time and cost-efficient manner by developing a competent estate plan. Development of a well written estate plan should avoid probate and ensure your assets pass to your intended recipients. For those that cut corners, or simply ignore the need, the outcome is costly.
Failure to Create Your Estate Plan
Estate planning is an important step that will save your family time and money and make sure the individuals you want to benefit from your life receive what you wish. Failing to create an estate plan, will result in the state making the decisions for you. For those without an estate plan the state will decide both who is in charge of your estate and who receives the assets that are in the estate. In making the determination of who receives assets the state is not going to examine your relationships with the individuals but simply who is the closest in family line. When Prince passed away in 2016, he did so without a Will. That forced everything that Prince owned at his death into the probate process costing an exorbitant amount of time and money. Years after his death, none of Prince’s family had received anything. However the lawyers, bankers and consultants involved had made millions in that same time frame. See https://www.kiplinger.com/slideshow/retirement/t021-s003-estate-planning-mistakes-celebrities-made/index.html.
Failure to Properly Draft Your Estate Plan
Be very careful if you are trying to do your estate planning without the assistance of a professional. The process is very technical and certain errors can be as bad as not completing your estate planning at all. In 1995 when former Supreme Court Justice Warren Burger died, he had typed up a Will of his own consisting of 176 words. See https://www.forbes.com/2009/11/24/princess-di-heath-ledger-brando-personal-finance-investment-guide-2-09-celebrity-estate-mistakes_slide.html#5157d87f2f69. Despite being a justice on the highest court in the land, he did not specialize in estate planning. His Will, while functional, resulted in his estate paying $450,000 in estate taxes that could have easily been avoided. See https://www.forbes.com/2009/11/24/princess-di-heath-ledger-brando-personal-finance-investment-guide-2-09-celebrity-estate-mistakes_slide.html#5157d87f2f69. I am certain that Justice Burger would have paid far less than the $450,00 in legal fees to get a competent set of estate planning documents in place.
Failure to Update Your Estate Plan
Client’s routinely walk into our office with documents that were prepared years ago. Once completed the documents were set aside and not considered ever again. It is not a good idea to ignore your estate planning documents so you do so at your own peril. Your estate plan should be updated and modified as your life evolves and changes. Many estate planning attorneys suggest that your documents be reviewed every three (3) to five (5) years. While this is a good practice, for some people it may not be practical. At a minimum, when things in your life change you should be evaluating those changes impact on your legal documents. Heath Ledger passed away without updating his estate planning documents to reflect the birth of his daughter, Matilda. As a result, his entire estate went to his parents and siblings. See https://www.forbes.com/2009/11/24/princess-di-heath-ledger-brando-personal-finance-investment-guide-2-09-celebrity-estate-mistakes_slide.html#5157d87f2f69. When Barry White died in 2003, he was separated from his wife but not yet completely divorced. As a result, his estranged wife received everything and his live-in girlfriend of several years and nine (9) children received nothing. See https://www.kiplinger.com/slideshow/retirement/t021-s003-estate-planning-mistakes-celebrities-made/index.html. When your life changes you must reexamine your estate planning documents.
Failure to Fund Your Estate Plan
When you are creating a Revocable Living Trust, or most any trust for that matter, the final step is referred to as funding. Funding is the process of retitling or assigning assets into the trust. Assets that are not titled in the name of, or assigned to, the trust are not governed by the trust. A fundamental goal of a Revocable Living Trust is the avoidance of the Probate Process which is both time consuming and costly. If the trust is not funded, the trust is essentially worthless for avoiding probate. Any assets that are to go into the trust would be subject to the full probate process. This is exactly what happened to Michael Jackson. He had established a Revocable Living Trust designed to transfer his estate to his mother and children without the need for probate. Unfortunately, the trust was never funded so all of his assets had to pass through the probate process to get to his intended heirs. The process took years and incurred significant legal and court fees while his mother and children were forced to live off of an allowance. See https://www.kiplinger.com/slideshow/retirement/t021-s003-estate-planning-mistakes-celebrities-made/index.html.
Educating Yourself with a Vision Meeting
If you or your family are struggling with any Estate Planning or Probate concerns, make an appointment with the experienced St. Charles Estate Planning Attorneys at Jones Elder Law. That way, you can decide what happens to the assets you worked so hard to acquire. If we can help guide you, contact our St. Charles Estate Planning Law Firm at (636) 812-2575 and ask to schedule a call or virtual consultation, what we call a Vision Meeting http://joneselderlaw.com/vision-meeting/. For your safety and ours we have developed the Minimal Contact Planning process to be used while the Covid-19 virus remains a concern.
