How to Avoid These Common Estate Planning Mistakes
By M. Keywood Deese, Texoma LIVING WELL Magazine
Whether you plan to use a trust or a will as the center stone of your estate plan, the following list may help you avoid some common estate planning mistakes:
1. Failure to plan for the transfer, closing or sale of a family-owned business:
Whether it is organized as a corporation, partnership, or sole proprietorship, it is a crucial part of your estate planning to arrange now what you want to happen to your business after your death.
2. Failure to plan when you have children by more than one spouse:
Remember to make special provisions for children by prior marriages.
3. Unwisely choosing the Personal Representative, Executor, or Trustee:
You can feel pressured by family members to name someone in your will (or trust) as Executor or Trustee for emotional reasons. Someone that serves in that capacity has a great deal of responsibility, accountability, and liability and should have a level of business or accounting experience so they can deal with the decisions required for managing the assets, filing tax returns and accounting to the probate court.
4. Failure to plan for incapacity:
It is critical that you also plan how your assets will be managed while you are still living but physically or mentally incapacitated. A Durable Power of Attorney should be considered as well as an Advanced Directive for Health Care (Living Will).
5. Overuse of jointly owned property––title designations:
When the first one dies, there is no probate of these types of assets and title merely passes to the survivor. So this effectively avoids the need to probate assets registered this way on the first death. The survivor then needs an estate plan to handle the inheritance of those assets at his or her death.
M. Keywood Deese is Senior Vice President & Trust Officer at Vision Bank, N.A. of Ada, Oklahoma.