Do-it-Yourself Estate Planning Can be an Expensive Mistake

do-it-yourself-estate planning, Wheaton estate planning lawyerIllinois residents work hard so they can enjoy the fruits of their labor once they retire and so they are able to provide for their families after they have passed. They want to ensure that even when they are no longer here, their loved ones have the financial assets to improve their quality of life. However, several costly estate planning mistakes can be made, and they can seriously impact an estate plan.

One of the most common estate planning errors is the belief that it can be done without the assistance of a qualified estate planning attorney. There are a multitude of online companies that offer estate planning forms for people to download and prepare themselves. However, the problem with these "do-it-yourself" documents is that there are specific laws, in each state, that govern estate planning. Therefore, if a person is not cognizant of the details of these laws, the simple "do-it-yourself" will or trust can end up being very costly—more costly than what an attorney would have charged to do it correctly to begin with. This is especially true when drawing up trusts, which many people utilize in order to help alleviate the tax implications that can sometimes come along with inheriting money.

Trusts do play an important role in estate planning and various financial planners advise people to not leave a large sum of money to heirs. Instead, set up trusts for them. This can be especially helpful to those who have an adult child with serious emotional or substance abuse issues. Additionally, setting up a trust which includes provisions, and appointing someone as a trustee, will prevent the funds from being spent quickly and inappropriately.

People who own their own businesses often forget to include the businesses in their estate plans. However, there are important plans that a business owner should have in place in the event of his or her death. For example, will the owner's life insurance cover the estate taxes when he or she dies?

Another issue that may need to be addressed is how a business will be divided among an owner's children. What happens when one child works at the business and the others do not? Not having a firm plan in place can end up causing your children to take a hard financial hit, and may additionally cause a family feud if all of the siblings do not agree how the business should move forward.

Finally many people do not update their estate plans when major life events happen, such as marriage, divorce or death. This is especially true when there should be a change of beneficiaries to go along with these events.

If you need to draw up new estate plan documents, or update the ones you currently have in place, please contact an experienced Wheaton estate planning attorney today to discuss what options will work best for you and your family.

Estate Planning Errors: Common Mistakes to Avoid

DuPage County estate planning attorneys, estate planning errors, estate planning, estate planning mistakes, estate planning problems, estate executors, power of attorney, beneficiariesLife is not always within our realm of control, and this is a fact that is often hard to swallow. However, it is an incredibly important concept to understand when partaking in daily responsibilities and activities, as everything carries a risk. And for this reason, it is critical to address the "what if's" before they arise by hiring a professional to draft a cohesive estate plan.

Several common mistakes can be made during estate planning, and these can be harmful both before and after death. In fact, these mistakes can have broad implications on family and loved ones. Consider the following list of frequently seen estate planning errors:

  1. Problems with beneficiaries: Too many people are under the assumption that their wills and trusts designate where all assets and finances are to be allocated upon death. The truth, however, is that certain retirement funds, IRA's, as well as life insurance do not apply to this, and follow the beneficiary you listed yourself. Be sure these beneficiary forms are consistent and updated. It is also important to list alternative beneficiaries should any problems arise.

  2. Choosing estate executors: Designating the person to ensure your wishes are carried out can often be the most difficult part of the estate planning process. Most people tend to default to using spouses, children, or siblings -which is not always the best choice. An impartial party or parties will cause the least amount of conflict and keep your intentions in mind first.

  3. Power of attorney issues: Much like an estate executor, the person you appoint to be your power of attorney to legally speak for you should be trustworthy and should completely understand your wishes. He or she must have no conflict of interest at all. Power of attorney can apply to financial and medical decisions. You should discuss these issues with your professional Illinois lawyer.

Having a written legal document in place to clearly outline your wishes in the event of death or disability does not only extend to the elderly. Life happens, and hiring a time-tested estate planning attorney can reduce, and even resolve, any problems for surviving loved ones. The Illinois law office of Stock, Carlson, Flynn & McGrath, LLC serves the greater Chicago area, and are available to assist every step of the way. Contact our experienced DuPage County estate planning attorneys today.

Common Estate Planning Mistakes

For some people, going through the process of estate planning is a difficult one because they lack familiarity with what to expect or simply underestimate the role that proper planning can play in your future. As a result, there are several common estate planning mistakes that are completely avoidable with the assistance of a trained Illinois estate planning attorney.

Mistake #1: Assuming You're Too Young For Estate Planning

Talking about estates immediately calls to mind images of grandparents or older adults, so individuals and families in their 30's have a tendency to think that estate planning isn't necessary at their age. Estate planning is actually much more comprehensive than determining what beneficiaries get what assets, and it's prudent to have an estate plan that reflects your needs at all stages of life.

 Mistake #2: Not Making Your Wishes Known

Of course, you should have a will on file that explains what you would like to happen to certain property after you pass away. Keeping the will a secret, however, is a mistake. Clueing your family into what they can expect after you pass limits the drama and disagreements that might unfold if you have kept the terms of your will secret. It's going to make things much easier if you tackle these problems now rather than leaving your beneficiaries to haggle over it after you pass away. Make sure at least one other person knows the location of your most recent will, too, so the chances of validity and will contestations are reduced.

Mistake #3: Not Updating Your Plan

Yes, you need to identify an estate planning specialist for an initial meeting. There's no doubt about that. Don't fall into the trap of assuming that's your last visit, however. Life changes, and your estate planning documents should reflect that. That's where a long-term relationship with a DuPage County estate planning attorney comes into play- you want someone who will continue to be there for you as you need amendments. Reach out today to discuss your new or existing documents.