Albert Einstein famously said that an intellectual solves problems, while a genius avoids them. Here is an example of how you should employ this mindset when you put your estate plan in place.
Estate planning attorneys help their clients make sound, intentional decisions relating to their estate plans when they manage to help clients minimize guilt, conflict and anxiety. At the same time, survivors should be allowed experience the natural process of grief.
You can devise your estate plan without lawyers or accountants. All you need is a credit card, a computer, a printer and access to the internet. Armed with those four things, you can create one or more documents that may — or may not — accomplish what you expect.
How do you stay in control of your stuff while you are able and assure that your wishes will be carried out when incapacity or the grim reaper catch up with you? Sorry to rub it in, but at least one of these possibilities is going to happen to you and odds are that both of them will.
Problems with your estate plan may not become apparent until it is too late to fix them. Here are some common pitfalls:
• Failing to plan for large expenses, such as long-term care. • Failing to update your estate plan, including beneficiary designations on bank accounts, investment accounts, retirement accounts and insurance policies. • Failing to take steps to avoid family strife. • Putting your kids on the title to your stuff during your lifetime.
Trust beneficiaries are sometimes left to wonder why a decedent instructed that a trust distribution be made in a particular way. The trust clearly identified who the beneficiaries were, what they were to receive and how they were to receive. But unfortunately, the trust was silent as to the “why” of the distribution — the underlying reason and purpose for creating the trust in the first place.
The good news is that the federal estate tax took a vacation in 2010. The bad news is that it spent the whole year lifting weights and taking steroids. The estate tax is coming back in 2011, as big and bad as it has been in a long time. Now is the time to review your estate plan and make changes that could drastically affect how much of your estate goes to your loved ones, and how much goes to the IRS.
Unless you keep up with critical changes, your estate plan will become ineffective and maybe even become harmful to you and your ‘ohana. What kinds of changes are we talking about?
Making an estate plan that clearly documents intention helps surviving family members avoid fighting; especially in court. Yet lawyers will write the estate plan for exactly that purpose — writing as if it were going to be fought over in court. I call this legalese legal dis-ease. Write your intentions down in your own hand-writing for inclusion in your estate plan so that you don’t risk miscommunication or misunderstanding among surviving family members.