Common Estate Planning Mistakes

Summary

The transcript summarizes a podcast hosted by Ralph Estep, Jr., a licensed public accountant, focused on common estate planning mistakes to avoid. Key topics covered include procrastination in creating estate plans, DIY plans causing issues, failing to inform heirs, overlooking digital assets, not regularly updating plans, and appointing unprepared executors. Ralph emphasizes estate plans should include wills, beneficiary designations, medical/financial power of attorneys, funeral instructions, asset paperwork, and digital fiduciaries. Takeaways include starting planning early before health issues, hiring estate attorneys, having open conversations with heirs, accounting for online presence, and choosing qualified impartial executors.

Chapters

Introducing Podcast and Host Ralph Estep Jr.

Ralph Estep Jr. welcomes listeners to his financial advice podcast and previews the episode on avoiding common estate planning mistakes to protect family finances.

Mistake 1: Procrastination in Creating Estate Plans

Waiting for a health emergency before making estate plans leaves families unprepared; over 40% without wills delay despite risks showing need to start planning early.

Mistake 2: DIY Estate Plans Causing Issues

Attempting estate plans without an attorney often yields incomplete or legally unsound documents creating complications; expertise tailoring customized plans is worthwhile.

Mistake 3: Failing to Inform Relevant Heirs

Not discussing estate plan intentions with heirs can cause confusion and conflicts later; having open conversations explains asset distribution rationale.

Mistake 4: Inaccessible Key Estate Documents

Safe deposit boxes make estate documents hard to access; provide copies to executors, trustees, family, and estate attorney for safekeeping.

Mistake 5: Missing Essential Estate Papers

Lacking wills, beneficiary forms, power of attorneys, funeral instructions, asset paperwork causes disputes; comprehensive plans prevent issues.

Mistake 6: Overlooking Digital Assets

Online accounts need assigning digital fiduciaries with access rights to properly handle valuable digital assets after death.

Mistake 7: Failing to Update Estate Plans

Major life events like marriages or acquiring property necessitate revising estate plans to avoid unintended outcomes.

Mistake 8: Appointing Unsuitable Executors

Choosing biased or unprepared executors/trustees to administer estates risks causing serious problems.

Welcome to the Ask Ralph show where we answer your toughest financial questions. I'm your host, Ralph Estep Jr. Today we're diving into a topic that affects us all and you need to pay attention to today's episode.

It's really important. That is common estate planning mistakes. Now trust me when I say that avoiding these mistakes can make a world of difference to you and your family. So make sure you stay tuned and listen to what we have to say today because this is going to be some vital information for you of things to avoid what we call our common estate planning mistakes.

Welcome to the Ask Ralph podcast. We're listening to an experienced financial professional can help you make sense of confusing questions current headlines and industry trends about taxes, small business, financial decision-making, investment strategies, and even the art of proper budgeting, as Ralph makes the complex simple by sharing his real-world knowledge with all things financial. Now here's your host, Ralph Estep Jr.

Folks, estate planning is crucial for protecting your family's finances after you're gone.

Now none of us really want to talk about this, but it's an inevitability. It's about getting your financial affairs in order so that your assets and possessions are passed on to the right people or organizations you want to inherit them.

It's all about making these decisions yourself. But did you know, and this is a fascinating one, I found this out, two of three Americans don't have an estate planning document. That's according to caring.com 2023 Wills in Estate Planning Survey.

Shocking, isn't it? And what's even more surprising is that around a quarter of those without a will said they don't ever plan on creating one. Today we're going to discuss eight common estate planning mistakes you should avoid at all costs.

So we're going to jump right into this. And like I said, this is not an easy topic to talk about, but it's a topic that we absolutely need to talk about. Now I want to start off by saying I'm not an attorney.

I don't play an attorney on TV. So the things we're going to talk about today, you want to follow up with a licensed attorney to help you fix these issues if you find yourself in these places. So what's the first mistake?

Mistake number one is procrastination. Waiting for a medical diagnosis or health emergency before creating an estate plan is not the way to go.Learn this firsthand in my family this year when my mother got sick.

Unfortunately, she passed away a march. A glioblastoma brain tumor but thank goodness she had her estate documents in place. Over 40% of Americans without a will admitted they plan on waiting for such circumstances again in this caring.com survey.

My friends, it's important. Don't wait. Get your estate plan in order now. My mother had no idea that she was going to get sick and pass away as quickly as she did. And fortunately for my sister and I, she had already put things into place.

Let's jump to mistake number two. And that's creating an estate plan on your own can lead to incomplete or arid filled documents that cause complications when you pass away. Consider hiring an experienced estate attorney who can help craft a comprehensive plan tailored specifically by you.

Now, we had somebody leave us a message about this very issue. Hi Ralph, I've been thinking about creating my own estate plan using online templates. Is it really worth hiring an attorney? That's a great question.

While online templates may seem convenient and cost effective, truthfully they often lack the necessary customization and legal expertise. The state planning documents that are incomplete or contain errors can cause complications down the line.

This is not an area where you want to scrimp and save. Hiring an estate attorney ensures that your plan is comprehensive and legally sound. Plus, many estate attorneys offer free initial consultations to help you get started.

So let's talk about mistake number three. Leaving loved ones uninformed about your attentions can create confusion and unnecessary stress in the future. You need to sit down with relevant family members and heirs and have an open conversation about your estate plan.

We had another caller leave us this message. Hi Ralph, I'm worried about potential conflicts among my family members after I'm gone. Any advice? You know, the truth is that really is a valid concern.

My wife and I faced the same concern just recently when we had updated our, you know, end-of-life estate documents and we shared them with our oldest son. And you know, he actually went through them and it was kind of comical because he didn't realize the breadth of what was involved in the estate plan.

But I think it's really important to do that. So sharing your estate plan with your family and heirs can help prevent confusion, conflict and unnecessary stress in the future. It's important that you have an open conversation about your intentions.

Everyone will be on the same page when it comes to distributing assets. And folks, don't forget to keep copies of your estate plan accessible. Mistake number four is keeping estate planning documents in a safe or safe deposit box that's difficult to assess.

Access. Make sure to provide a copy of your estate plan to your appointed executor, trustee, a trusted family member and your estate lawyer for safe. keeping. Now, mistake number five, let's move on to that.

And that's missing key documents in your estate plan can create confusion, even disputes among heirs when you pass away. It's essential to ensure that your plans includes these essential documents. Now, listen again, I am not an attorney, I am not giving you legal advice.

You need to consult with an attorney, but when I saw how many people don't have these documents, I thought it was really important to share this information. But again, meet with an attorney and get these documents in order.

What are these essential documents? Well, the first one's a last will and testament. This document outlines your final wishes for asset distribution. The second thing is beneficiary designations. And this is really important.

And this is something you don't have to have an attorney for. And that's assigned beneficiaries for accounts like 401ks, IRAs, pensions, and life insurance policies. I've dealt with this in my practice, where somebody had an investment or an insurance policy and they didn't name a beneficiary that created all kinds of issues.

The next document is a durable power of attorney for medical care. You really want to appoint someone who can make medical decisions on your behalf. You become mentally incapable. We went through this at my own mother and it was so reassuring to know that she had left an advanced medical directive so that when the doctor told us about her grim expectation of life we knew what decisions were already made because she had already decided on those things.

Another thing is a durable financial power of attorney. That's where you assign someone to manage your assets if you become incapacitated. It's another very important document to have. How about funeral instructions?

A lot of people don't think about this but funeral instructions are really important. You want to specify burial or cremation preferences and the type of funeral service desired. You may even think about going and pre-planning those.

We just did that from my mother-in-law. She's has dementia and we wanted to make sure that first of all she had the assets to cover what she wanted as a funeral but to make sure all those arrangements were in place.

You want to provide proof of identity. You want to gather important documents like your Social Security card, birth certificate, marriage and divorce certificates and prenuptial agreements. And then finally you want to make sure you put aside deeds or loans for large assets, collect paperwork for properties and other significant assets.

So let's move on to mistake number six. Mistakes number six is overlooking digital assets. In this digital age, many people forget to account for their online presence when creating an estate plan considering assigning a digital fiduciary in your estate plan who has the right to access your digital assets when you pass away.

We got another call about this very topic. Hi Ralph. I have a lot of cryptocurrencies and online accounts. How do I include them in my estate plan? This was another excellent question. Including digital assets like cryptocurrencies, social media accounts, cloud storage and digital files in your estate plan is crucial.

Look, we live in that kind of age my friends. Assigning a trusted individual as a digital fiduciary ensures that these valuable online are properly managed after you're gone. Now, I think it's Facebook, I don't remember a few months ago, they let you, I wanna call it's a legacy contact or something like that, so if something happens to you, someone can access your account.

Now folks, don't forget to review and revise your estate plan regularly. Mistake number seven is failing to update your plan after major life events such as a marriage, divorce, birth of children or grandchildren or acquiring new assets.

Failure to do so can lead to unintended consequences like passing assets on the unintended beneficiaries. Mistake number eight, appointing the wrong executor or trustee can cause problems during administration of your estate.

It's essential to choose individuals who are unbiased and get their permission before assigning them as executors or trustees. You don't wanna just drop that on them. You know, this is something you wanna have a conversation with them in my own personal life when we decided to appoint our son to handle this, our oldest son.

You know, we had a conversation with them. We said, listen son, are you prepared to make these decisions? You're prepared to handle this. Remember folks, avoiding these common mistakes is crucial for protecting the financial well-being of your loved ones after you're gone.

Don't leave it up to chance. You have the power. You might not have the power to control your own passing away, but you do have the power to control how things are handled with your assets. So before we wrap up today's episode on common estate planning mistakes, I wanna remind you all about our podcast page at www.askralphpodcast.com.

Be sure to share this episode with friends and family who could benefit from this valuable information. And while you're there, leave us a review or even send us a voicemail. Like I talk about in the bottom right corners, a little microphone icon, click on that, send us a voicemail just like these people did today.

With any questions you'd like for us to answer or comments about the show. And a special thanks is always to our sponsor, Saggio Accounting Plus, experts in financial management that you can trust. That's all for today, folks.

Stay tuned for more episodes of the Ask Ralph Show where we tackle your toughest financial questions. Until next time, keep asking Ralph. Thank you for joining us on the Ask Ralph podcast. And with a simple click to subscribe, we'll invite you back to our next episode.

And remember, financial issues don't have to be complicated. Just ask Ralph. The information contained in this episode of Ask Ralph is based on data available as of the date of its release. Saggio Accounting Plus and Ask Ralph Media Inc.

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