Millionaire alert
Estate-planning mistakes to avoid
Not having a plan
If you do not have an estate plan, the state in which you live has one for you—but it probably
will not be what you would have wanted. State laws vary, but generally they leave a percent-
age of your assets to your family members.
Not naming a guardian for minor children
You can only name a guardian for your minor children through a will. If you have not done
this, and both parents die before your children reach legal age, the court will have to name
someone to raise your children without knowing whom you would have chosen.
Not planning for incapacity
If you can't conduct business due to mental or physical incapacity, only a court appointee can
sign for you—even if you have a will, since a will only goes into effect after you die. You
can give someone power of attorney, but that person can do anything he or she wants with
your assets with no real restrictions. A living trust gives the person(s) you choose to act for
you the right to do so without court intervention, yet they are held to a higher standard as a
trustee. If they misuse their power, they can be held accountable.
Not using a qualified attorney
Estate planning is not something you should do yourself with a kit or online program. Simple
mistakes or omissions can have far-reaching effects that only come to light after you are
gone. An experienced estate planning attorney understands the technical terms and legal
requirements in your state.
Not funding your living trust
A living trust can only control the assets you put into it. You may have a great trust, but until
you fund it (by changing titles and beneficiary designations), it doesn't control anything.
Your estate plan is based on your current personal, family and financial situations, and the
tax laws in effect at that time. All of these will change over time, and your plan needs to
change with them. It's a good idea to review your plan every couple of years or so and make
sure it still does what you want it to do. Your attorney will let you know when a tax law
change might affect your plan.
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