After one finally sets aside the time needed to estate plan and gets it finalized, we may think that our job is done. However, in addition, to periodic updates, there are also some common mistakes,
post estate planning, that can invalidate our best intentions and efforts.
Guardianships
For those of us that have minor or disabled children, naming the perfect and appropriate guardian is a key concern. But, after finding that perfect guardian, remember, to name alternative guardians as well. Otherwise, our children may end up in foster care or with a family member we never wanted to care for our children. This means, at least, naming two alternative guardians, and to ensure that each is willing to act as a guardian. Do not blindside a loved one with that responsibility without first ensuring they want that responsibility.
Joint accounts
Many of us have joint accounts, usually, with our spouses. As we age though, we may also add a child to our account as well to help pay for day-to-day needs. This creates a problem, if that entire account is not supposed to go to that spouse or the child when one dies. This is because, when the primary account holder dies, the account becomes the sole property of the other joint account holder. This is regardless of whatever one’s estate plan states. Plus, even if the surviving heirs agree to some equitable split, trying to navigate gift taxes at the state and federal level can be a nightmare.
Heirs across multiple generations
Another issue can arise when estate plans have bequests that cross generations. This can occur when an estate plan does not have a trust, but intends to bequeath percentages to heirs, their minors and then additional generations. There could be legal arguments to disallow this structure, which will likely require probate litigation that delays bequests and increases costs, reducing the value of the estate.
What we can learn
For our Torrance, California, readers, a key takeaway is that estate planning itself can be complicated, but so to can what we do after an estate plan. This is why one should go over their estate plan with their attorney to see if there is anything they should not do, or if there are alternative ways to do what we want to do that can
avoid issues after finalization.
