It can be difficult to set up and manage an estate plan. However, it is incredibly important to protect yourself, your loved ones, and your estate. An estate planning attorney in St. Charles can help you create an estate plan that covers your needs.
A good estate plan will vary based on your needs, but there are specific mistakes you want to avoid so that you have a clear and enforceable estate plan that limits conflict between your loved ones. Common estate planning mistakes include:
Failing to Create an Estate Plan
An estate plan, whether comprehensive or simple, can provide significant benefits to you and your family members. A will is one of the most basic components in a simple estate plan, and it can state how you want your assets distributed, provide contingent beneficiaries, set an executor in charge of your estate, and list guardians for your minor children. This can provide you with very basic protections in probate court if the will is legally enforceable.
If you don’t have a will, your estate is split according to the state’s intestate succession laws.
However, a will is still a public document, and the assets in the estate still pass through probate. Comprehensive estate planning that includes trusts can save your loved one’s time and money by keeping the assets private and out of probate. Probate can take significant time, and the court costs, potential state or federal taxes, and other costs can limit the benefits your heirs receive from your estate.
A comprehensive estate plan can also give you more protections, such as planning for potential incapacitation.
Not Regularly Updating an Estate Plan
Once you have created your estate plan, you should not just leave it be. Your wishes for executors, beneficiaries, or powers of attorney may change over time, and significant life changes can alter the assets or who you wish to receive those assets. Some life changes can render the entire plan unenforceable. Estate plans should be updated every 3 to 5 years at a minimum. It should also be reviewed and updated after important life changes, such as:
- Other additions to the family
- Investment in or creation of a business
Having several versions of an estate plan from updating it over time can also limit the success of contests to your will or estate plan. The court can review the changes you made in the past to determine if the most recent version of your will seems to reflect your wishes.
Failing to Plan for End-of-Life Care
It’s important to plan for long-term care, your own medical preferences, and how important legal and financial decisions are made on your behalf if you become incapacitated and unable to make these decisions. Planning for long-term care is also useful for paying for your care in the future and near the end of your life.
Although no one likes to think that they may become incapable or incapacitated, it commonly happens at the end of people’s lives and can even occur sooner after an accident. A comprehensive estate plan can create a living will and medical directives, which determine your wishes for medical care.
An estate plan can also include powers of attorney documents, which place individuals in charge of your medical care decisions, financial decisions, and legal decisions if you are unable to make those choices yourself. Without these documents, loved ones must take significant time and effort to request these legal powers from the court, often during a very critical point of your health and well-being.
Having Mismatching Beneficiaries
When you first create your estate plan, be sure to review the individual beneficiaries listed on individual accounts like insurance policies, retirement accounts, and investment accounts. These are likely accounts that you list as part of your estate and name beneficiaries for.
If the individual account and the estate plan list conflicting beneficiaries, this can create conflict. The beneficiary on the account is what is given precedent, and this may not be who you want to benefit from the asset. Additionally, the beneficiary in the estate plan may contest the decision, lengthening proceedings.
Q: Does a Trust Have to Go Through Probate in Missouri?
A: Trusts, when done properly, do not go through probate court. A trust is one of the most effective and common ways for individuals to keep assets in their estate from entering probate court. A trust is a separate legal entity that passes from the trustor, or creator of the trust, to the trustee when the trustor dies.
Because the assets put into the entity of a trust never pass under state jurisdiction, probate court does not have control over the assets and their distribution. Instead, the trustee is in control of the assets in an estate and their distribution to beneficiaries.
Q: Why Do People Avoid Estate Planning?
A: There are many reasons people avoid estate planning, including the stressful nature of creating the plan and considering your own death and mortality. Planning for your loved ones and your estate after your death can be overwhelming or discomforting for many. However, estate planning can help with more than the end of your life.
Many people also believe they are too young to have an estate plan and do not realize the long-term benefits of planning early and planning for unexpected incapacity or death.
Q: What Are the 3 Main Priorities You Want to Ensure with Your Estate Plan?
A: Every person who creates an estate plan will have their own unique priorities depending on their estate, the assets and debts in the estate, and the needs of their beneficiaries. For most individuals creating a comprehensive estate plan, it should address:
- Determining the distribution of your assets in a way that protects them during your life and after your death
- Planning for how decisions are made on your behalf if you become incapacitated
- Clearly defining your beneficiaries and limiting the expenses and time of probate court
Q: How Much Does an Estate Have to Be Worth to Go to Probate in Missouri?
A: Estates valued over $40,000 must go through probate court. An estate worth less qualifies for simplified probate. Creating trusts and taking other steps in estate planning can prevent an estate from entering probate court, even if it is worth more. This can save loved ones and heirs the time, stress, and expense of probate court, which can take months to years to complete.
Contact Stange Law Firm
For help with a comprehensive or simple estate plan, contact the team at Stange Law Firm.