Here at the Law Office of David M. Goldman, we come across many estate-planning problems that can be avoided by careful planning and forethought. With higher estate tax exemptions most individuals don’t have to consider avoiding estate taxes, so we often recommend a person’s estate planning goal be to leave behind a legacy that will preserve and protect your family.
A common mistake clients often make is to not name a contingent beneficiary of a retirement account or bank account. Generally, every retirement account requires a person to name a beneficiary, but a problem can arise if this named person passes before the retirement account holder. Always specify at least one contingent beneficiary to inherit the account if the primary beneficiary dies before you. It is also important to learn the difference between “per stirpes” and “pro rata” designations. Per stirpes means that if the named beneficiary dies, that person’s family inherits what the dead person would have inherited. Pro rata means the inheritance goes to the other surviving named beneficiaries. With the recent Supreme court decision, we often recommend that your trust be named as the primary beneficiary of your retirement accounts to avoid loss to the creditors of the beneficiaries. Another great way to avoid a potential conflict is to have a written bequest of unique personal property. For special assets, family heirlooms, and other collectibles, we recommend clients specify in writing who should receive these items. This bequest can be done by a separate writing that may be referenced in the will, but created as a separate document.
We urge our clients to also prepare for incapacity. As we grow older it becomes more difficult to take care of ourselves without help. By planning ahead, you can choose who will be in charge of managing both your mental and physical health when you are no longer able to do so. This can be done through a durable power of attorney and other estate planning documents. These documents will give an individual the power to make important decisions as well as to receive confidential health information.
Further, it is important that when it comes to estate planning matters the right person be picked for the job. Wills, trusts, powers of attorney, and other estate planning tools often require a person to be named that will represent your interests. These people should be chosen carefully, should have good judgment and financial acumen, and should have a good understanding of your intentions. For instance we recommend our clients name a guardian for their minor children in the case the unthinkable happens and both parents pass away. This guardian should be someone the parents trust to look after the children. We recommend that clients think about what values these potential guardians might have, and to consider the nature of the current relationship is between the potential guardian and the children.
For more information on how to avoid potential issues with your estate-plan, contact our office today at 904-685-1200