Three Estate Planning Problems You Can Avoid

By Lane V. Erickson, Idaho Estate Planning Attorney

Estate planning is typically not complicated. There are some very specific basic things that every person should have as part of their estate plan. The documents for a basic estate planning include a written last will and testament, a durable power of attorney, a power of attorney for health care, and a living will. Additionally, you may need one or more trusts as part of your estate planning to accomplish your goals.

Whatever your unique circumstances are, and no matter how peculiar the goals you have for your estate-planning, they can be accomplished when you use a qualified estate planning attorney to help you get it done. At Racine Olson, we have a team of premier Idaho estate planning attorneys who have the skills, knowledge, and experience necessary to help you with all of your needs, no matter what they are. Our skilled team of lawyers focus on estate planning and keep up with any changes in the law that could affect your estate plan. With this knowledge and experience we are able to create a written estate plan that accomplishes exactly what you want.

If you have read any of our articles you know that we often talk about the importance of using a qualified estate planning attorney to help you with your needs. The reason for this is simple. If you were having problems with your heart, you wouldn’t go to a foot doctor to find out what’s going on. Rather, you would find a good cardiologist who could examine you and describe what your circumstances are and how to best treat those circumstances. The same is true for lawyers.

Despite what some lawyers may tell you, estate planning is neither simple nor is it rudimentary. Rather, each of your own peculiar and unique circumstances should be considered so that the right estate plan and documents can be prepared for you. Additionally, there may be other actions that need to be taken after the documents are prepared and signed. This is the biggest area that I find that lawyers who do not do estate planning usually fail in.

If you find you do have questions about your completing your own estate planning, we encourage you to download our Estate Planning Questionnaire which gives you the ability to organize all the information you need to consider when it comes to your own customized estate plan.

Once the Questionnaire is completed, we offer a free 30-minute consultation to go over your information and help you decide what you want to accomplish. We answer all your questions and review all your information so we can describe to you the customized estate plan you need to meet your needs, and to accomplish what you want.

The purpose of this article is to describe three things that you should also consider when it comes to your estate planning, that aren’t necessarily involved in your documents. These are three things that non estate planning attorneys often overlook, and that can cause problems for your family and loved ones after you pass away.

The first area that is often neglected, or overlooked, by attorneys who do not specialize in estate planning is the proper designation of beneficiaries on your non-estate planning assets. You might be surprised to learn that you own assets that don’t actually belong to your estate. However, it is true.

For example, life insurance is a contract you have with an insurance company where they agreed to make a lump-sum payment to whoever you designate so long as you have paid your premiums. Like life estate, there are other items you may own such as 401k accounts, IRA accounts, annuity accounts and so forth that also allow you to designate a beneficiary.

It’s important that you properly designate beneficiaries on each of these items. Also, it’s important that you keep these beneficiary designations up to date, depending on the current circumstances of your life. For example, if you were married and you listed your spouse as the recipient of your life insurance and you then become divorced you would want to make a change. Alternatively, it is possible that your spouse could have died before you as well. In both circumstances it is important that you update the beneficiary designation forms so that all of these non-estate assets can be distributed without having to include them in the probate process.

Another mistake that is often made by attorneys that don’t specialize in estate planning is that they name minors as beneficiaries on life insurance or accounts. This could be a big mistake for several reasons. First, if you have listed an individual who is a minor as a beneficiary, then what actually happens is the money and property is distributed to their legal guardian. The legal guardian is supposed to keep this money or property safe so that it can be distributed to your child at the appropriate time. However, what often happens is the individual designated as the guardian often misuses this money.

Second, when you have named a minor as a beneficiary there is a legal obligation that the money and property be distributed to them when they become an adult. In Idaho, a person becomes an adult at the age of 18. In other words, this means that a teenager could be inheriting a large sum of money or property at a time when they have very little experience or maturity. They may not have the ability to handle such a large inheritance.

When you work with an experienced and skilled estate planning attorney, they would be describing options you have for how the money and property you want to leave to your minor age child can be done in a way that is both safe, and that protects it from misuse either by a guardian or by the minor themselves. You have the ability to create a plan for caring for your minor child without creating issues or problems for them down the road.

The final estate planning problem that we will discuss that you can avoid easily is forgetting to fund a trust. Often trusts are an important and necessary part of an estate plan. However, there are several steps involved in making sure that a trust will actually work as part of your estate plan. First, a trust must be created. This is done when the documents are drafted and then properly signed, dated, witnessed, and notarized. However, this is not all.

When working with an attorney who is not experienced in estate planning many clients believe they are done once the trust documents are completed. But this is not true. The trust documents are much like a pie crust. A pie crust does not actually make a pie. It does however create a space for things to be placed into the pie so that the pie is complete.

The most important part of the pie is the pie filling. In this instance, when we’re talking about a trust, we’re talking about transferring money or property or other assets into the trust so that the trust is properly funded. If a trust is never funded, then it is simply a pie crust with nothing in it.

We work with each of our clients individually to make sure we know what property they want to be transferred into their trust so that it is properly funded. Additionally, we work with our clients to make sure that any changes or transfers involving property are done correctly so that the trust can still maintain ownership over those items. In other words, we will use our skills and experience to help our clients do their trust correctly.

We are happy to help you with any of your specific estate planning needs. If you have questions or concerns, we are confident that we can answer those questions and help you create a customized estate plan that meets your needs. Please contact us today for a free 30-minute consultation where we can answer your questions and help you move forward with your customized estate plan.

Our team of Idaho lawyers can help you with any of your estate planning or probate needs. Whether you are seeking to create or review an estate plan for yourself or would like to help a loved one, we are available to discuss your options and answer your questions at an initial free 30-minute consultation. Call us toll free at 877-232-6101 or 208-232-6101 for a free consultation. You can also email us directly at lane@racineolson.com or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho estate planning problems.