November 30, 2009 Monday Mastermind Show

Wednesday, November 25th, 2009
by Joe

Podcast: Play in new window | Download

“DIRTY DOZEN” ESTATE PLANNING MISTAKES
Robert A Ross, JD, CELS, AEP
33 Years of Experience,   Ross Estate Planning Attorney, Certified Estate Planning Law Specialist, Accredited Estate Planner

Mistake #1:  No Health Care Guidance
A. Problem:  (1) Do you want the Judge to make your medical decisions? (2) What happens when your child turns 18?
B. Solution:  A Gift to your family. Durable Power of Attorney for Health Care, Hipaa Consent, Family Conversations and discussion with your Doctor.
Mistake #2:  No Financial Incapacity Plan
A. Problem:  Who can handle your financial affairs when you cannot? What happens when you add your children to your accounts?
B. Solution:  Durable Financial Power of Attorney given to someone you trust. Give children signature authority not ownership.
Mistake #3:  Haphazard Wealth Transfer Strategy
A. Problem:  No will or Trust. No Babysitter instructions. Who will take care of your children? Who will get your stuff, when and how? Joint ownership not what it’s cracked up to be!
B. Solution:  My Definition of Estate Planning. Will is a first step, but a better plan is a fully funded Revocable Living Trust. Disability instructions. Location Lists. Check title to all assets and review all Beneficiary designations. Letter of instructions to the Guardians. Explain Estate Plan Pyramid
Mistake #4:  Death Taxes
A. Problem:  Death Tax rate is about 50%.
B. Solution:  Comprehensive estate plan, Coupon Story, Estate Plan team (Atty CPA INS Agent, CFP, Trust Officer) all talk to each other.
Mistake #5:  Unprotected Children’s Inheritance
A. Problem:  What if your child(1) gets divorced, (2) gets sued, (3) gets into a car accident, (4) Business failure, (5) has serious health problems? Everything you worked so hard for is lost in an instant. Corvette University/ The child who does not handle money well. Think what you would do if you were handed a lot of money?
B. Solution:  Inheritance Protection Trust/ CASTLE TRUST/Drawbridge Cop/Special Needs Trust.
Mistake #6:  Loss of Family Virtues & Values
A. Problem:  When a library burns down we lose all of the stories. Same thing happens when a parent dies! How would you pass on your stories?
B. Solution:  Family meetings, involve children in the process, Legacy or Heritage statement, ethical will, letter of instructions to children. Go thru that group of pictures and tell who the people are and the event.
Mistake #7:  Wasting Retirement Plans
A. Problem:  Retirement Plan Tax Bomb. Triple Tax, (Estate Fed and State Income Tax)/. Beneficiary Designation Form: Where is it,? What does it say? Anything Changed?
B. Solution:  Review Beneficiary Designation form annually, and keep a copy where it can be easily found. IRA Protection Trust, Stretch IRA, Roth Conversion, Insure it, Spend it now to create memories and buy long term care Ins.
Mistake #8:  Failing to Organize & Consolidate
A. Problem: Where is your stuff? Who are the important people to call. Digital age, passwords, Online accounts! Property in other states.
B. Solution:  Consolidate accounts, get securities to your broker. Prepare a Location List. Put copies of Tax returns and asset lists in your estate plan portfolio. Introduce your advisor team to your family. A Wonderful gift is to pass on your team to your family.

Mistake #9:  No Spouse’s Inheritance Protection
A. Problem:  Spouse Remarries. We call that disinheritance by remarriage, Spouse becomes incapacitated or goes to a nursing home?
B. Solution:  Spousal Protection Trust
Mistake #10:  Personal Property Chaos
A. Problem:  Who gets Grandma’s yellow Pie Plate? Dad promised that gun collection to me. What happened to all of mom’s jewelry?
B. Solution:  Involve family early, Family meetings. Digital records of personal property, Personal Property Memo, Pass on the stories why the heirlooms are important!
Mistake #11:  Trying to Do it Yourself
A. Problem:  This is called the Attorney’s Retirement Plan. Would you do your own surgery? You will not know the problems you have created until after your gone. If you want Uncle Sam and the Lawyers to inherit your estate by all means do it yourself.
B. Solution: Estate Planning is a specialty. Find an Attorney who specializes in Wills, Trusts and prepares a comprehensive plan for you. Will spend time with you to find out what your goals and expectations are, and will tailor the plan to your directions. This is not a “one size fits all”.
Mistake #12:  Believing Estate Planning a One-time Event
A. Problem:  Do rules Change? You learn new things? Change your mind? Life change?
B. Solution:  When you go thru life changes such as , marriage, divorce, death of a spouse or family member, remarriage, birth of a child or grandchild, an inheritance, retirement, change in your health review your estate plan and update it.
C. If none of the above happens it is good to review every three to five years.

Complete Trust Package: 
Pourover Wills,
Revocable Living Trusts,
Durable Powers of Attorney,
HIPAA Consent,
Certificate of Trust,
Funding Instructions,
US Living Will Registry,
Trust ID Card,
Personal Property Memorandum,
Memorial Instructions,
Location List,
Emergency Instructions