Rowley Law

5 Critical Mistakes To Avoid For Your Estate Planning

I don’t think it can be said enough that estate planning is one of the most important things you can do in your life. By taking time and putting a plan in place, you protect your loved ones form countless pains. It is a final gift that you can give your loved ones to help them after your gone.  Surprisingly one of the first people most families will talk to about planning is their financial advisor and not an attorney. Most often, after speaking with their financial advisor’s people come to the Attorney office with  an idea of what they want. Which is ok, anything that gets you started on the right path is a good thing. But, with it how critical estate planning is, it is important to avoid making mistakes with your plan. A recent article from U.S. News & World Report, “Estate Planning Mistakes Advisors Make” looks at five things your financial advisor might forget to go over with you when talking about getting your planning done.

1. The Client Procrastinates. What you talk about needing or wanting three month or three years ago might not be the same now. This is particularly true when it come to assets values and types, which are important pieces of information for an attorney to have when crafting your plan. So do delay, talk to an attorney as soon as possible.
2. Review of Existing Documents. Your financial advisor might not know if you have planning in place already, and is probably not aware of how that planning affect what you do next. Make sure to speak with an attorney about any prior planning you have done, and give them the prior planning to review.
3. Assuming Equal and Fair are the Same Thing. A lot of people think the equal mean fair, but the words are not synonymous with each other. Make sure to talk with your attorney about the individual situation of your family to decide what is fair for you.
4. Assets Have Not Been Professionally Appraised. As said above value and type of assets are important pieces of information for an attorney to have when they are creating a plan for you. They can help to determine how the assets pass, and how your whole plan is structured. So getting a correct value for major assets like a business is critical.
5. Key Players Are Not Still Viable. Planning needs to be updated regularly for many reason, including changes in the people you name in your planning. People change and life happens, so the people you chose years or even months ago may not be a good fit any longer.

Reference: Pinkerston, Julie. (2021). US News & World. Report. 5 Estate Planning Mistakes Advisors Make. https://money.usnews.com/financial-advisors/articles/estate-planning-mistakes-advisors-make.

Plan to Avoid Guardianship

Guardianship is the process by which the courts grant a person control over another. Each state has its own laws, rules, and regulations covering how guardianship is attained through the court. No matter what state you are in, getting guardianship is a time-consuming and expensive process. A recent article from the News-Enterprise, "Planning can avoid guardianship," looks at what you can do to avoid guardianship.

The primary way to avoid needing guardianship is by having a valid power of attorney in place. A power of attorney is a planning tool in which you, the person who makes it, grants someone, generally referred to as the agent, the power to decide for you.  They can be used for medical and financial decisions depending on the type you have. Power of Attorney is an important planning tool for everyone to have in place to avoid the need for court. There are many types of power of attorney, and speaking to an experienced estate planner can help you determine what type of power of attorney is right for you.

Another option for avoiding guardianship is a revocable trust. While we usually think of revocable trusts as a probate avoidance tool, when funded, a trust can give your trustee control of the assets in it. Again, this can help to avoid guardianship, particularly over significant assets like real estate.

Guardianship proceedings are costly and time-consuming and should be your family's last resort. Protect your loved one from this by proactively getting your planning in place. 

Reference: Griffin, C. (2021). The News-Enterprise. Planning can avoid guardianship. https://www.thenewsenterprise.com/features/seniors/planning-can-avoid-guardianship/article_e1a994d4-57aa-5bc2-831b-1d3d195f64d1.html

8 Vital Reasons to Update Your Planning

So you have a trust, will, and some powers of attorney. Congratulations, you should give yourself a well-deserved pat on the back for completing some that almost half of people never do. But just because you finished your planning does mean it is done. A recent article from The Record-Courier, “Revising an estate plan crucial to making sure end wishes are carried out,” takes a look at why it is crucial to keep your plan up to date and when you may need an update.

Having your planning reviewed and updated makes sure that your wishes are carried out. Without updates to your planning, the planning may end up not accounting for all your assets or even directing investments to places or people that no longer exist. According to the article, eight main categories could warrant an update to your planning.

1. Whether it is a new child, grandchild, or even niece or nephew, a new person in your life can mean changes to your planning. Therefore, it is essential to have your planning reviewed to ensure that this new person is included in the way you want.
2. Losing someone is hard. It affects your life in many ways, and it also affects your planning. After a loved ones’ passing, your planning should be updated to reflect the change and keep the distribution process as clean and straightforward as possible.
3. Health Changes. If you, someone who will inherit or someone you have named to be in charge, become ill or disabled, your planning should be updated to reflect this. You may even need special provisions added to your planning to protect that person.
4. Asset Changes. As your assets increase, decrease or change type, your planning needs to be updated to reflect these changes. Asset levels and types have a significant effect on how proper planning is designed and how it functions.
5. Business Changes. If you have a business and restructure or make any other changes to its operation, such as stock trading and other modifications, your planning should be updated to reflect these changes to ensure that your business can continue even when you are gone.
6. People Changes. Not to be cliché, but people change. The person you chose to manage your finances three years ago may not be the best now. AS the people in your life grow, mature, and change, you should update your planning to reflect this.
7. Marriage Changes. Whether you’re tying the knot or severing it, changes to your marital status need to be reflected in your planning.
8. Time changes many things, including laws. It is crucial to have your planning reviewed at least every few years to ensure the rules and regulations used to create it still apply. Changes to the law can significantly affect your planning.

No matter the reason for the change, speaking to an experienced estate planning attorney will help make sure that your planning works for you.

Reference: Anonymous. (2021) The Record-Courier. Revising an estate plan crucial to making sure end wishes are carried out. https://www.recordcourier.com/news/2021/sep/19/revising-estate-plan-crucial-making-sure-end-wishe/

Plan for the Golden Years

Many people have an idealized view in mind for how they would like to spend their golden years, and a good number of those people will even plan to make sure they can spend their time traveling or sitting on a boat in the middle of the lack. However, few people will make a plan to handle the more unpleasant side of aging, and far too many people leave those decisions until it is too late. A recent article from Clarksville Now, “Talk to older parents about legal issues now, before problems arise,” looks at why it is essential to speak with your parents to make sure they have a plan in place and how to start that conversation.

While it can be unpleasant, it is crucial to ask your parents about what will happen if they become ill or pass away. Do they have their essential information stored safely and in a way someone can access them if necessary? Do they have a trust or will to make sure their belongs go where they want them to?

Setting up an appointment with an experienced attorney can help get this conversation started. Make sure to look for an attorney who handles elder law and not just estate planning. While the two are similar, elder law looks at what happens after passing and when incapacitated and focuses on maintaining the quality of while.

Reference: Holden, T. (2021). Clarksville Now. Talk to older parents about legal issues now, before problems arise. https://clarksvillenow.com/local/talk-to-older-parents-about-legal-issues-now-before-problems-arise-commentary/