Leaving your estate in good order for your family is one of the greatest gifts you can give your loved ones. Here are some common mistakes that cause estate plans to fail and what you can do to avoid them.
1. You’ve never updated your will or trust
As the years go by, life happens. Perhaps you have children or even grandchildren now. Maybe you are divorced now or have recently retired. All of these life changes should be reflected in your estate planning documents. The law also changes. Both North and South Carolina have enacted changes to their probate statutes in the past five years. North Carolina has also changed its elective share statute in the past few years. The elective share is the minimum amount you must leave your spouse. To make sure you stay ahead of these changes, it is best to review your estate planning documents every couple of years. Sometimes, people haven’t looked at their wills for so long, they are surprised at what the document says! Update your documents now if you have had a life or family change such as marriage, divorce, the birth of a new child, or retirement.
2. You never funded your trust
Many people created revocable trusts a few years ago, but never funded them. I have had numerous people come in to my office with a one dollar bill or a ten dollar bill attached to a list of assets and nothing else in the trust. If you haven’t funded your trust, it will not avoid probate. If you only partially fund your trust, only the assets in your trust will avoid probate. The goal is to transfer all probate assets into the trust so the trust will achieve its purpose. Keep in mind that simply listing the asset on a list of assets is not always enough. For example, in order to transfer real estate into your trust, you must obtain and record a new deed. If you haven’t done this, it doesn’t matter that the house is listed on a list of trust assets; it is not in your trust. If you have a question or concern about whether an asset has been properly transferred to your trust, contact your estate planning attorney.
3. You can’t find your documents
If you can’t find your documents, no one else can either. Make sure you know where your documents are located. Also tell the person you have chosen to be your Personal Representative and power of attorney where you keep your documents.
4. You didn't plan for long-term care and special needs family members
Leaving an inheritance outright to a loved one who is receiving means based benefits for long-term care or special needs benefits causes problems and may even cause an interruption in necessary services. Additionally, the inheritance money will probably be subject to government pay-back requirements. All of this can be prevented by the creation of a special needs trust.
If you have questions or would like to have Nancy review your existing estate plan, call 704-887-5242.
DISCLAIMER: The contents of this post are for educational purposes only. The information offered in this post does not constitute legal advice and reading the information does not create an attorney client relationship with Nancy Roberts or the Law Office of Nancy L Roberts PLLC Firm. Before taking any action, you should always seek legal advice from an attorney you hire, who advises you based on your specific facts, circumstances, situation, and the appropriate governing law.