In honor of both Halloween and National Estate Planning Awareness Week in October, I thought it would be fitting to share a few estate planning horror stories that could have easily been avoided with the right planning. These are mistakes that we see all too often and that happens every day.
Procrastination is the Silent Killer of Most Estates
We all procrastinate things throughout life and, for far too many people, that includes estate planning. They always think that's something they have time to do “later”. However, if the pandemic taught us one thing, it taught us that anything can happen to us at any given time, regardless of age, gender, race, occupation or net worth. Whether it's getting your estate plan set up or getting the plan you may already have reviewed on a regular basis, don't let procrastination become one of your biggest regrets!
Estate Planning Isn't Just for Seniors
One mistaken belief about estate planning is that it is something that you do when you get older and are retired or a senior. Estate planning is so much more than just the distribution of your assets after you pass away. Estate planning also dictates the management of your financial and medical decisions while you are alive, but may not be able to do so. This means that when someone turns 18 years old and their parents lose any and all control to handle these things for them, there are some basic and fundamental legal documents needed. Additionally, once you are married and have children, there are guardianship and other decisions that you will want to have established through a properly drafted estate plan to ensure that your wishes are honored if something should happen to you.
Where There's a Will, There's A…
…PROBATE! All too often, we receive phone calls from individuals who say that they want to set up their Will. After attending one of our seminars, many quickly learn that a Living Trust estate planning vehicle is a far superior plan to help accomplish goals for estate management, preservation and distribution. While a Will may be better than nothing at all, a Will is a guaranteed ticket to Probate Court. If you are not familiar with the Probate process in California, it can be a very lengthy and expensive process - - all of which could easily be avoided by setting up a revocable Living Trust instead!
Trusts Are Not Just for the Wealthy!
Another common misconception is that estate planning is for the wealthy or ultra-rich. This is why I intentionally did not want this article to focus on the numerous celebrity estate planning mistakes, because while some of the same estate planning horror stories that happened to some celebrities could happen to anyone, I did not want to perpetuate the idea that these mistakes were only costly and devastating because those individuals had estates worth millions of dollars. The fact of the matter is that most individuals who work hard their whole life, to purchase their home or business, need estate planning just as much as anyone else. Estate planning will help ensure that their hard-earned assets are preserved and are properly managed and distributed when the time comes.
All Living Trusts Are Not Equal
I am always astonished at the number of cheap, do-it-yourself, internet-based Living Trust documents that come across my desk from clients who come in and who want me to fix these trusts. The fact is, there really is no fixing these trusts. You've got to throw them out and start over, but that assumes that you come in before it's too late. If the trustmaker is incapacitated or passes away, there's not very much that we can do. While it is clear that these individuals understood why a Trust was better than no plan at all or a Will-based plan, their desire to save a few hundred dollars to get the cheapest trust they could get their hands on often times resulted in thousands of dollars and countless headaches dealing with the aftermath, which could include ending up the estate being contested in litigation court or possibly having your estate still go through a Probate.
Estate Planning is NOT One and Done
Having been in this business for over 30 years, I can tell you that I have seen many other colleagues experience having drafted a plan for a client and then never seeing them ever again. It boggles my mind, because Living Trusts are revocable and everyone's situations, needs and circumstances change. Also, over the years, the estate planning community continues to see new and improved strategies and recommendations for clients. Most people do not need to update their estate plan every year, but we have found that every three years is the ideal time to review your plan and make sure that it's up-to-date with your current wishes and any planning recommendations that we may determine when we meet with you. In fact, I would say that having an outdated plan can sometimes be just as bad as not having one at all!
Leaving Other Loved Ones in the Dark
Last, but certainly not least, one of the other “horrors” that we find is that more people do not understand or know about the importance of estate planning and have clarity on all of the above misconceptions we have shared. This is one of the reasons we hold free seminars (to help educate and inform the public) and it's also one of the reasons why we recommend that our clients who have set up an estate plan with our firm to help encourage friends, family, coworkers, church members, neighbors, and others they may know to attend one of seminars. If you have ever heard about or experienced the potential consequences of not properly planning your estate, you already know how dreadfully stressful and financially devastating that can be. It does not have to happen to you or someone that you know - - but you've gotta take action NOW!
Help us spread the word about estate planning and how are helping thousands of people in the Antelope and Santa Clarita Valleys and North Los Angeles County areas. Forward along this article and invite them to attend one of our upcoming seminars. They can also call our office at 661-945-5868.