3 Common Estate Planning Pitfalls

A comprehensive estate plan is individually tailored to meet your unique needs and objectives. As a result, each person’s estate plan may differ substantially. However, as you go through the estate planning process, you should be aware of some common pitfalls to avoid. An estate planning lawyer at Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. can evaluate your situation, present the full range of options available to you, and help you avoid choices with a risk of adverse consequences for you and your family.

  1. Making Specific Bequests

You may include specific bequests in your will, especially if you want to leave certain items of personal property to certain people. For instance, if you want your only daughter to receive your grandmother’s jewelry and your son to receive a piece of family artwork, you can include those as specific bequests in your will.

However, using a specific bequest can also result in unintended consequences. For instance, suppose that you leave one of your children 100 shares of stock in a particular company as his share of the inheritance. When you make your will, the stock is worth $100,000. However, by the time you pass away, you have sold the stock years ago, or the stock is now worthless because the company has gone bankrupt. In this situation, your specific bequest fails, and you could leave that child nothing unless you have made alternate provisions in your will.

Similarly, suppose that you leave your home to your older son as a specific bequest in your will. You don’t make a specific bequest to your younger son in your will because you have named him as the beneficiary of a life insurance policy. However, some years before you pass away, you sold your home and used the proceeds to pay for long-term care. Therefore, your specific bequest fails at the time of your death, and your older son receives nothing.

As a result, if you wish to use specific bequests in your will, you should review them annually to determine whether they still meet your needs and intentions based on your current circumstances.

  1. Choosing the Wrong Executor or Successor Personal Representative

Every family is different, and there is no right or wrong choice for the personal representative or successor personal representative of your estate. For instance, many people choose their oldest child to act as their personal representative by default. Sometimes, choosing your oldest child may be the correct and wisest choice. However, if your oldest child is less than reliable, you likely should rethink that decision.

You may also consider the location of your preferred personal representative. For example, if your oldest child lives in California, it may not be preferable or reasonable for him to handle your financial and business affairs after your passing in Florida. On the other hand, it may be much easier for your middle child, who lives locally, to take on these responsibilities.

Finally, consider naming a professional or corporate personal representative instead of a family member, especially if your estate is complex. For example, if a special needs trust or another type of ongoing trust is a major element of your estate plan, choosing a professional trustee may be wise. Likewise, appointing a professional personal representative may be the best choice if your assets are significant and the estate will require a great deal of administration and work.

  1. Failing to Update Your Estate Plan

Especially if you create an estate plan early in life, it is critical for you to routinely review and update your estate plan so that it can reflect your current wishes and objectives. At the very least, you should revisit your estate plan after major life changes to ensure that your estate plan still truly represents your desires for the distribution of your assets after your death.  Major events such as births, deaths, divorces, adoptions, business investments, and accrual of significant assets should trigger a review of your estate plan.

Reviewing your estate plan involves more than updating your will. A complete estate planning review includes your beneficiary designations on life insurance policies, retirement accounts, and similar assets. You need to keep these designations in mind and coordinate them with the provisions in your will and/or trust.

Furthermore, if those people you have designated to receive these assets have passed away or are no longer a part of your life for some reason, you likely need to designate new beneficiaries. Similarly, if your minor children have come of age, you may wish to substitute your adult children for others you previously designated to receive the assets.

Finally, laws change over time. Therefore, you will want to ensure that your estate plan complies with all relevant laws and that none of the provisions in your will or other documents conflict with current law.

Contact Our Office Today for All Your Estate Planning Needs

At Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A., an estate planning attorney can provide you with a full range of estate planning services, including special needs trusts and other accommodations for loved ones with special needs. In addition, if you lose a loved one, we are here to assist you with all estate and probate-related needs.

We can guide your family through the complicated legal landscape of estate planning law as quickly and efficiently as possible. Call us at (954) 966-2112 or learn more about the legal services we can offer you online. Please schedule an appointment to talk to us about your legal needs right away.

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