Estate planning can be an uncomfortable topic. Nobody enjoys talking about death or what's going to happen to our property after we die. But estate planning is an important process to protect your beneficiaries from creditors, poor decisions, family conflict, and stress. Here are five things most people get wrong about estate planning.
1. "I'm not a multimillionaire. Estate planning is only for the rich."
This is one of the most common misconceptions an estate planning Lawyer will hear. Everyone has property they value, be it grandpa's old wristwatch, a piano, or a piece of real estate. Perhaps there's even a child who requires long-term care. Everyone should have an up-to-date estate plan in place, regardless of wealth.
2. "It's not complicated. I can follow a DIY YouTube tutorial."
Ask any business Lawyer, family law Lawyer, or an estate planning Lawyer about the consequences of doing any sort of "do-it-yourself" legal process. The legal system is complex and constantly changing. And if you're not careful, you could leave behind a huge mess for your loved ones to clean up.
An estate planning Lawyer is always learning about the most recent changes and updates. One missed signature or mistake in wording could be extremely costly. When it comes to the legal system -- where the smallest error could have the most undesirable consequences -- we highly recommend not going the DIY route. Working with a professional will provide you with valuable peace of mind.
3. "I have a will. That's good enough."
A will is not the same as an estate plan. A will is a document that is just a small part of the estate plan. An estate plan takes into consideration many different legal documents and how they work together. The estate planning Lawyer will make sure all the legal documents, including the will, are in perfect order.
In the event of your death, there will be no family or business associate discord, confusion, or legal holdups. The process of handing your estate over to your beneficiaries will be smooth.
4. "I'm married. When I die, everything goes to my spouse."
You may wish everything to go to your spouse after your demise, but there are many different legal and other complications that could arise that prevent this from happening. Everyone from creditors to business Lawyers could go after your assets. An estate planning Lawyer will help make sure your designated beneficiaries legally get the assets you want them to get, without any legal loopholes.
As an asset class, residential real estate is a $29 trillion industry, while commercial real estate adds another $10 trillion. If you have residential or commercial real estate, it's critical to have a beneficiary in place. Assuming that your spouse will automatically become your beneficiary could lead to major problems after your death.
5. "I'm in my thirties. I am years away from having to think about estate planning."
In the event of your death, your residence could end up in probate court. Assuming you're in your thirties, you might have a spouse and dependents. If so, this would be an enormous burden to place on them. Creditors, extended family, and other outside parties (e.g. personal injury Lawyers) could also come after your estate. It's never too early to start thinking about estate planning, even if you're in the prime of life. Estate planning will allow you and your family to prepare for unexpected events; it's better to have everything in place well before you need to than for loved ones to needlessly suffer later on.
Through years of experience and continuing education classes, estate planning Lawyers understand the formalities involved in drafting a solid estate plan. In addition to estate planning, they can also help you draft a power of attorney and medical directives in case you become incapacitated.
Did you know 71.6% of Americans lack a will or estate plan? If you don't already have your estate plan in place, now's the time to get your affairs in order. Please contact us today to get started.
“I recently learned that my elderly Aunt is a victim of Fraud. The police have advised me that some victims of the fraud are considering a lawsuit and that someone may wish to speak to a Lawyer on my Aunt’s behalf. My Aunt suffers from dementia and I hold power of attorney. Can my Aunt participate in a lawsuit?"
Special rules apply to lawsuits involving people, like your aunt, who suffer from a mental illness and therefore lack capacity at law.
Generally, children under the age of 18 and people who suffer from mental illness, including those who suffer from dementia, must be represented by a litigation guardian within legal proceedings. There are also special rules which apply to how limitation periods apply to persons who lack capacity at law.
Litigation Guardians assume responsibility for litigation on behalf of a litigant who lacks capacity. Litigation Guardians serve an important role and are saddled with significant responsibilities. They assume the responsibilities of retaining and instructing Lawyers on behalf of the incapable litigant, and litigation guardians assume personal responsibility for any costs liability incurred as a result of a lawsuit.
However, the litigation guardian plays an essential role in ensuring access to justice for some of society’s most vulnerable people. Without people agreeing to stand as Litigation Guardian people who suffer losses could be left without recourse to the courts.
Generally a Lawyer works very closely with a litigation guardian to ensure that risks are properly understood. Lawyers also put in place measures to ensure the risk of personal exposure to the guardian is minimized.
If you are asked to stand as a litigation guardian you should consult with a Lawyer before deciding whether or not to stand.
We have been married for the last 25 years but don’t have any children. Do we need a will, or would everything just go to the surviving spouse anyway?
Yes, you do need a will. Whenever you don’t have any children, under the statutory distribution scheme for individuals that die without a will, your spouse would receive your entire estate. However, you should still have a will for at least two reasons:
- Appointing an executor of your estate; and
- Making instructions for the distribution of your estate in the event that you’re predeceased by your spouse.
Appointment of an executor of your estate.
The executor named in a will has the legal authority to take possession of all your assets, do your final income tax returns, and deal with banks and government institutions. If you don’t have a will, a court would have to appoint an executor of your estate to deal with any assets that were not jointly owned, as well as any registered investments that did not have a named beneficiary. The process of appointing an executor usually takes few months, so in addition to incurring unnecessary costs, there will be an extended delay during which your spouse will not have access to the assets in your estate. In my experience, some financial institutions will waive a probate requirement if your spouse is the named executor and the only beneficiary of your estate, which could provide your spouse with ready access to some assets shortly after your death.
Distribution of your estate if you survive your spouse.
By having a will in place, you will make sure that your estate is distributed the way you want it to be in the event that your spouse passes away shortly before you, or in the event that you are unable to make a will after your spouse’s death. Under the statutory distribution scheme, if you don’t have a spouse nor children, your estate would go to your parents. Alternatively, if your parents are deceased, your estate would go to your siblings. This may not be your wish. For example you might want to leave part of your estate to your spouse’s family, or you may wish to skip your parents and siblings and distribute the estate among your and your spouse’s nieces and nephews, or make gifts to a charity or charities. No matter which option you choose, having a will can provide the peace of mind of knowing that your estate will be distributed according to your wishes.
My elderly mother was diagnosed with dementia a few months ago. She is rapidly deteriorating. She does not have signed powers of attorney documents. I have three other siblings. We need to sell her house and get access to her finances to pay her bills. What do we have to do?
Lawyer under power of attorney
Depending on your mother’s current mental capacity she might still be able to appoint an Lawyer under power of attorney for property or personal care. In order to determine whether you mother still has a mental capacity to execute power of attorney documents she will have to undergo a capacity assessment performed by a specially trained health care professional. If the capacity assessment finds that your mother has capacity to appoint an Lawyer under powers of attorney, she can visit a Lawyer to help her prepare and sign powers of attorney documents.
If your mother does not have the mental capacity to appoint an Lawyer, you and your siblings can apply to be appointed Guardians of Property for your mother. There are two ways this can be achieved: by applying to the Office of the Public Guardian and Trustee or making an application to the Court. The less costly and simpler way is to apply to the Office of the Public Guardian and Trustee. The process of applying and the application forms can be found on their website. In order to be able to apply to the Office of the Public Guardian and Trustee, you and your siblings would have to agree on whom to appoint as Guardian. In the event you and your siblings cannot agree on the appointment, someone will have to apply to the Court to be appointed Guardian for your mother.