Do It Yourself – Gone Wrong
Another article in this newsletter addresses how to complete a home improvement project and provides tips involving whom you should never hire, that the project will cost 20% more than you anticipate, and that you should know your strengths and limitations. The article also advises that you draw up plans before beginning.
Beginning your estate plan also requires that you follow certain tips:
- Make a list of all assets, including life insurance, real property, pension plans, how they are titled, their value and any beneficiaries.
- Make a list of family members and write it down so you know who is married to whom, who are the children of which marriage and who are disabled or minors.
- Do NOT pull a form off the internet. Lawyers don’t just fill in blanks!
- Do not contact an attorney who does not handle estate planning. The days of “any lawyer can draft a Will” are long gone.
- Remember, “You get what you pay for.” Just as a home project can get seriously out of hand, so can a poorly designed estate plan spell disaster for the ones you leave behind. You won’t know if your plan is wrong. Your family will deal with the mess.
If you prepare your own Will from a form on the web, you have no legal advice, and no one is checking to make sure the information is complete and correct. You will not be able to take advantage of the knowledge an estate planning attorney can provide about income and estate taxes and other options that may be available – such as certain trusts to protect minors or disabled individuals, to protect profligate spouses or children; to minimize capital gains tax; to protect an elderly person from financial abuse; and to ensure that a subsequent marriage by your spouse will not undermine your plan.
Here is a list of some of the simplest mistakes that I have encountered, and the family comes to me, after your death, to settle everything:
- The Will is not properly executed – so that generally, it cannot be admitted to probate and, so, is useless. Your property is given away according to the way the Alabama legislature has determined.
- The terms of the Will are not in the proper order. If you say, “I give all to my spouse” and then say “I give my guns to John” you have a problem that only a court hearing can resolve. That costs money and takes time.
- A beneficiary loses his or her government benefits because you give them assets outright instead of in a properly drafted special needs trust.
- Children end up receiving substantial sums of money when they are 19 or 21, and it is blown within a year because you failed to put the inheritance into a trust to control the distribution until they are old enough to appreciate the value of money.
- Your ex-spouse gets your money.
I’m just getting started! Protect yourself and your family. Don’t try this at home. Engage an attorney who knows what he or she is doing about estate planning; who will ask the right questions and give you the opportunity to think through the issues as you may never have before. Does it cost money? Yes. So does fixing the mistakes! And it’s a lot more money than the original plan.