Category: Estate Planning

10 Most Overlooked Issues in Estate Planning

Posted on: May 15th, 2011
A couple of days ago I blogged about the dangers of bad estate planning, and presented a hierarchy of worst to best ways to plan.  Today I’m providing a list of 10 of the most overlooked issues in estate planning (things that frequently aren’t dealt with in lesser methods of planning).  Many plans will address some of these items, but it’s a rare plan that has adequately covered everything.  The most important thing is that the person doing the planning is informed of all of the issues.  That way they can make an educated decision that certain things need or need not be provided for in their particular plan.  Here’s the list, in no particular order:
1. Probate – not considering court fees, attorneys fees, delay, frustration, etc. of a court-supervised estate administration.
2. Asset Protection – leaving assets outright to spouses, children, etc., with no thought of creditors, divorce, mismanagement, eligibility for governmental benefits.
3. Taxes - not considering income, gift and estate tax implications of gifts and bequests.  For example, giving one’s house away during life without retaining a life estate can cause your children to pays then thousands of dollars in unnecessary capital gains taxes.
4. Family Dynamics – for example, naming one child as trustee for another may cause a rift between them.
5. Attorney’s fees – poor estate planning can cause the future expenditure of thousands of dollars in attorneys fees from will challenges, beneficiary determinations, guardianships etc.
6. Successor Fiduciaries – failure to name back up executors and trustees, or provide the beneficiaries with a way to fill a vacant role, so that a court proceeding is required.
7. Contingent Beneficiaries – failure to name someone or some charity to receive your estate, in case, for example, your immediate family is killed in an automobile accident.
8. Effect of  Beneficiary Designations -  life insurance and retirement accounts generally cannot be controlled by a will – those assets go to the named beneficiary.  Another problem is failure update or confirm beneficiary changes..
9. Effect of Joint Accounts – these cannot be controlled by a will and belong to the surviving owner upon death, who has no legal obligation to distribute according to your will.
10. Need for Professional Advice – estate planning specialists can their clients with all of the above issues and more.  After an initial consultation, my clients often tell me they had no idea that estate planning was so complicated and that there were so many different things to consider.  Make sure you and your family are protected!
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