Recently Comstock’s Magazine, Sacramento’s most prominent business publication, asked me about dangers to look out for when planning your estate. I shared my thoughts on how to avoid potential future estate and trust litigation with Comstock’s writer Jennifer Fergesen. Here are the top five points I discussed:
- Misunderstanding Estate Laws and Terminology: Knowing the basics of what differentiates, say, a will from a trust, or how to keep an estate out of probate will help you save time and money.
- Getting the Wrong Advice: Experience and credibility matter, so treat finding the right lawyer or financial advisor you’d be looking for the right doctor to manage your health. Ask questions, do some research, and don’t be afraid to get a second opinion. Stay away from trust mills and dubious cookie-cutter estate operations that are a ploy for selling insurance or annuities.
- Designate a Co-Trustee Whom You Trust: Elderly trust makers who appoint themselves as a sole trustee of their own trust might be vulnerable to undue influence or elder financial abuse down the line – Alzheimer’s or dementia can play a role. The best practice is to designate a responsible co-trustee who has your best interests at heart.
- Losing Track of Assets: Life insurance beneficiary plans, 401(k) funds, or individual retirement accounts can sometimes fall through the cracks. Make sure these policies are up-to-date and in place for the right beneficiaries.
- Consider All Your Options: Each estate or trust is unique due to both financial and family circumstances. Don’t think that you automatically have to structure everything in one predetermined way – talk to an experienced estate attorney who can craft the right plan for your family’s future.
Thank you to Comstock’s and Jennifer Fergesen for a great synopsis of how you can increase the chances of success for your trust or estate. If you remember one thing, you should know that there isn’t any 100% bulletproof estate plan. But you can take steps to safeguard your inheritance from common pitfalls and prevent a worst-case outcome.