Having an estate plan protects your loved ones and attempts, as much as possible, to be sure that your assets are distributed the way you wish after your death.
Court Cases involving challenges to estates are increasing every year mainly for one of the following reasons:
• Problems with the way the will and other documents were drafted or prepared;
• Because someone feels they were treated unfairly.
Contested wills and other estate docs can cost your loved ones both financially and emotionally.
, your financial adviser
can assist with your estate planning preparation and also advise on the appropriate professional for each part of your estate planning needs.
Following are our 7 deadly sins of estate planning:
Allowing a grudge against a family member to make decisions in regards to estate planning can be a big problem. Some of the biggest fights in estate litigation come from disentitled beneficiaries who feel that either they should have been left something, or that what they were provided with is not sufficient.
Did you know…. although marriage generally revokes all previous Wills, in some states divorce does not. Both marriage and divorce can impact on a Will in different ways, so marriage breakdown and remarriage should be a trigger to review one's estate planning arrangements.
It is important to speak to the appropriate professional to manage these decisions in such a way as to protect your wishes and your intended beneficiaries.
You get what you pay for is a phrase we all know. DIY Will kits and cheap estate planning services seem quick and easy, but the reality is they are extremely basic and cannot cover every eventuality.
Just because a document is in the format of a Will does not mean it actually covers everything required, especially if the person completing the DIY Will form does not understand how to structure their financial affairs or sort out ownership of assets.
For example, It is not just the complicated issues that cause problems with estate planning. Very simple mistakes can make a Will meaningless, and often some basic advice would have made all the difference.
We all lead busy lives and putting things off that don't seem important at the time is an easy mistake to make. This is dangerous particularly in regards to developing an estate plan.
Anyone who has children, or superannuation, or a home should have an estate plan. No matter what size your estate is, some kind of planning is required. In fact, superannuation is a commonly misunderstood factor in estate planning. A Will cannot direct where your superannuation deaths benefit go. Unless you make a nomination within your superannuation account someone else (normally the superfunds trustee) will decide who your money should go to.
Many people pass with far more in their superannuation than they do in their personal estate and without the proper advice these funds will not reach their intended beneficiary.
One of the most valuable aspects of an estate plan is the capacity to establish a power of attorney to make decisions on one's behalf if required.
It can be hard for people to accept that they are not indestructible - that they may not have the mental capacity in the future to manage their affairs. Properly setting up a power of attorney means that unacceptable situations - such as medical decisions being made against someone's will or money being used for purposes they would not readily agree to - can be avoided.
There are different types of powers of attorney for different purposes, such as financial, medical treatment and guardianship. They can be temporary or enduring. The right professional can help you through the various options so that you are comfortable with your decision.
There have been a number of cases in recent years where children from extramarital relationships have successfully made a claim on an estate. While it may not be an issue that most people need to consider for themselves, there are still lessons that could be learnt.
Recent court battles highlight the increasing role that courts are taking in awarding significant portions of estates to people that were not originally included as beneficiaries.
Did you know…. There have even been instances of neighbours who helped bring in the grocery shopping or other tasks who claimed their relationship was more that of a "parent/child". In many of those cases, they have successfully obtained a share of the estate.
After the passing of loved ones, emotions run high and, previously close-knit families, can end up in bitter disputes over the contents of a Will. Several recent cases show close family members, distant relatives and, in some cases, non-related acquaintances successfully challenging wills.
It may be that the Will maker felt there was a good reason for leaving more money to one child than to another, for instance, they may have helped the other child set up a business. Unless this is explained clearly - preferably not just in the estate plan but before they die - it can cause significant resentment.
Proper advice is important as you will not be around to explain your intentions. It is a large mistake to assume that a misunderstanding could never occur in your family.
Not so much gluttony perhaps as omission. Charity is something that is easy to overlook in your estate planning even if it is something you rigorously pursue in your everyday life.
Leaving something to charity in your Will, either as a bequest or by setting up some kind of foundation after your death can create a legacy that will carry on after you are gone.
Once again it is another area where getting advice from an expert can help ensure everything is covered off and that all your wishes are carried out after death.
If any of the above "sins" leave you wondering or you would like to begin the discussions around your estate planning contact Power2 today
. We are happy to answer your questions and have the professional connections you need.
Article Source Hacker, A Kaplan Higher education May 2016