THE TOP SEVEN ESTATE PLANNING MISTAKES AND HOW TO AVOID THEM

THE TOP SEVEN ESTATE PLANNING MISTAKES AND HOW TO AVOID THEM

With a busy family life and/or professional life, it’s easynto overlook the essential steps of estate planning. Fortunatelynthe most common mistakes are mistakes of omission. Here’s hownto avoid them.

One:
Inventory your assets.

Make a complete inventory of your assets: real estate,ninvestments, bank accounts, insurance policies, annuities nand retirement plans. The inventory should identify eachnasset, its value, and the name or names on the title. Fornassets that pass by beneficiary designation, (life insurancenpolicies, annuities, retirement plans, pay-on-deathnaccounts)list the primary and secondary beneficiaries.

Two:
Update titles and beneficiary designations.

The inventory will identify if any assets are titlednincorrectly. For example, if your spouse owned the housenbefore your marriage, was your name added to the deed? If nthe inventory reveals that any asset is titled incorrectly,ntake the necessary steps to correct the title.

Just as the inventory identifies if any assets are titlednincorrectly, it also identifies any beneficiary designationsnthat are incomplete or out-of-date. For example, you may havenneglected to name a secondary beneficiary for an IRA, 401knplan or annuity. Or you may have forgotten to remove a formernspouse as beneficiary of an IRA or life insurance policy.
Take corrective action as necessary.

Three:
Name guardians for minor children.

It is critical that you choose who you want as guardian fornyour children if you and their father die while the childrennare minors. If you have not chosen a guardian, the court willnmake the choice and the court might not choose the rightnperson. By naming a guardian you inform the court and familynmembers of your choice thereby eliminating guesswork, erro
and competition among family members. You name a guardiannin your will.

Four:
Name financial and medical powers of attorney and write anliving will.

A financial power of attorney appoints a trusted person tonmanage your finances if you become physically or mentally nunable to manage them yourself. A medical power of attorneynappoints a trusted person to make medical decisions for younif you are incapable of making them. A livingnwill tells your family, your doctor and other medicalnpersonnel that you do or do not want to be kept alive bynartificial means. You must be competent to sign thesendocuments. n

Five:
A Will does NOT avoid Probate.

Assets that pass by will are transferred to the intendednrecipients through probate court. Most people believe thatnif they have a will they have avoided probate. But it’s justnthe opposite; probate is required for assets passing by will.
Probate is also required, in most circumstances, if you dienwithout a will.

Six:
Keep your documents in a place that’s safe AND accessible tonthe person who will manage your affairs at your disabilitynor death.

Once you have your financial and legal documents in order,nstore them in a safe place, inform a trusted family member ofnthat safe place, and make certain that he or she can access thendocuments at your disability or death.

Seven:
Stop procrastinating.

As in most important undertakings the first step is ALWAYSnthe most difficult. But once you get started, everythingnquickly falls into place. Your reward will be the peace ofnmind that comes from knowing that your family’s financialnand legal affairs are in order and up-to-date. Stopnprocrastinating and take action now!nnnÓ Julie A. Calligaro 2007-All Rights Reservednn ************************************************************
Julie A. Calligaro is probate and estate planning attorney with 25 years of experience and the author of Arranging Your Financial And Legal Affairs and The Widow’s Resource.
Demery Publishingn20600 Eureka Ste 900
Taylor, MI 48180
734 283 1509
Fax 734 246 8635
http://www.estateguides.com/
http://www.demerypub.com