As we all waited in long lines for gas and supplies in the face of oncoming Hurricane Iselle, we were reminded of the importance of planning ahead for inevitable catastrophic events. Here are some things NOT to do with your estate plan, according to Casey Dowd in his article, “Estate Planning Mistakes Every Boomer Should Avoid,” published on foxbusiness.com:
- Fail to plan for large expenses such as long-term care. This may not seem like a big deal when you are relatively young and healthy, but fully 70% of us can expect to be completely incapacitated for some period of time before we die. Many of us will need care that cannot be provided in our homes in a cost-efficient way. Our options are: (A) be fabulously wealthy, (B) plan ahead, or (C) fall upon the mercy of governmental programs. (B) works best for most of us.
- Fail to update beneficiary designations on bank accounts, investment accounts, retirement accounts, and insurance policies. Having a will and revocable living trust agreement is not enough. Better yet, transfer your assets (or funnel them by way of updated beneficiary designations) to your trust. Don’t forget that you need to update your will and trust from time to time. A lot of things change: (health family situation, assets, laws, the list of people that you like and trust to have making decisions on your behalf.) Review your estate plan annually, but also make changes any time new things occur.
- Fail to take steps to avoid family strife. Making your intentions clear is the first step. You may also build incentives (and disincentives) into your estate plan to head off courtroom battles.
- Use a “do it yourself” computer program to design your estate plan. If you truly know what you are doing, these kinds of tools may work. If not, they are a crapshoot. Gamble with your family’s future if you like, but better to save your loved ones a good deal of time and money by not taking shortcuts.
- Put your kids on the title to your stuff during your lifetime. Not only might you be setting them up for capital gains taxes, bit also you may be putting your assets at risk. Once you give something away, it is gone. Not even your kids’ good intentions will spare you from the wrath of their creditors or ex-spouses.
Estate planning is serious business, and you are better off doing it right. Usually, that will mean working with professionals who will charge for their services. Shop around until you find advisors who will help you devise a workable plan, know what they are doing, and who are worth their fees.
Scott Makuakane, Counselor at Law
Focusing exclusively on estate planning and trust law.
Watch Scott’s TV show, Malama Kupuna
Sundays at 8:30 p.m. on KWHE, Oceanic channel 11
O‘ahu: 808-587-8227 | email@example.com