Jennifer C. Rydberg, Attorney at Law
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Kent Estate Administration and Probate Law Blog

Estate planning mistakes to avoid

Kent area residents who have taken the time to create an estate plan are ahead of the game. Although creating an estate plan may not appeal to many people, these plans are critical in order to make sure a person's family and assets are protected. But, there are estate planning mistakes that should be avoided.

One of the biggest mistakes that a person can make when it comes to estate planning is not having an estate plan at all. Not having an estate plan puts the fate of their children, their family, their health and their assets in the hands of others. Another mistake is not having directives in place. These directives include health care directives and a financial power of attorney. When these documents are not in place, it can be left to the court to make these decisions. For those who have children, not having a guardian or having an inappropriate guardian named can be another mistake. Sometimes, people choose grandparents to be guardians, but that may be a mistake as the grandparents may be too old.

How often should a will be updated?

Many families in the Kent area have taken the time to create their wills. A will is an important estate planning document that can help a person dictate how their assets should be distributed upon their death. It can also name guardians and other important tasks. But, just because a family has created wills doesn't mean that estate planning is done forever.

A will is a legal document that may need to be revisited over a person's lifetime. Just because a person creates a will doesn't mean it is a static document. There are many life changes that can occur that may affect a will. These include getting married, turning 18, retirement or entering a nursing home. It may also need to be amended for a birth of a child, death or divorce, birth of grandchildren, buying real estate, inheriting money or creating a succession plan for a business.

Estate planning with medically fragile children in mind

Families in the Kent area who have medically fragile children know how difficult day-to-day life can be. A medically fragile child requires a lot of care, money and time. Families need to plan ahead for their vulnerable child and prepare for the potential time when their child outlives them.

When parents find out that their child has a medical condition, it can be devastating news. These children will totally rely on their parents for much of their lives and many will need around-the-clock care. Special needs children may also need expensive medication and have many other medical expenses. Parents who have vulnerable children need to plan for their future. If the parents die before their children, it is important to have a plan in place for their care.

Why setting up a trust may be a good idea

Many Kent area residents have taken the time to analyze their estate plan and create one that makes sense for their unique situation. Every family is different and estate planning needs vary on many factors. For some, a will may not be enough to address all needs and a trust may need to be considered.

It a well-known fact that everyone, regardless of circumstances, should have a will. But, for some families, a trust can also be necessary. One popular type of trust is called a revocable trust. A benefit for a revocable trust is that the estate will not have to go through probate following a person's death. The trust can also be updated at any time during a person's lifetime. And, if the person becomes incapacitated, the trust ensures that bills will be paid. A revocable trust can do everything a will does, but it comes with greater privacy and is not subject to outsider review.

What should I include in an effective estate plan?

There are several different components of an effective estate plan that our readers should be aware of. An effective estate plan protects both the estate planner and the estate planner's family. It can ensure that assets are distributed according to the wishes of the estate planner and that the estate planner's family does not have to worry about matters concerning the estate at a difficult time.

There are several components for a comprehensive estate plan. Effective estate planning involves several different types of documents, including a will, trust, advanced health care directive, power of attorney and HIPAA form. A will designates how the estate planner wants their assets to be distributed. There are important requirements for a valid will, so it is essential for the estate planner to be familiar with what those requirements are. A living trust or other type of trust is also an important component of an estate plan that can provide greater flexibility, confidentiality and less cost, but a trust must also be properly funded so, like a will, it is important for the estate planner to be familiar with the rules of a trust.

What happens if your parents with no assets?

While many Kent area residents believe their money will last way past when they die, many times their savings don't last forever. Children who are left behind after their parents die may wonder what happens if their parent dies with no assets.

Sometimes, when a person dies, they leave a financial mess behind. Children in these situations may worry that they will have to deal with the financial burdens. Almost half of senior citizens die with less than $10,000. In addition, many seniors are dying with debt, which is a relatively new phenomenon. They may still owe money on their home mortgage or they could have credit card debt.

Why a living trust may be important for your situation

"Living trusts" is an estate planning buzz word that many Kent area residents have heard of, but may not understand what they are. They can be a valuable estate planning tool for many families, but mistakes can be made with them as well.

Living trusts are established when a person's assets are transferred to a trust and the person has control over the trust as a trustee. The main advantage of establishing a living trust is that an estate can avoid probate. After the person passes away, the assets in the trust are obtained by the successor trustee and are passed to beneficiaries or distributed based on what was directed in the trust agreement. This ensures a person's estate matters remain private and the assets are not recorded. A living trust can also be to a person's advantage if they become disabled. A successor trustee would be able to take over and manage the assets.

Explaining the differences between a will and a trust

There are many estate planning terms that most people in the Kent area have heard of. Some of the more common terms are wills and trusts. Even though these are common terms, a person may not know what they mean.

First, there is a will. A will is a document that takes effect after a person dies. The will allows a person to name an executor for their estate and controls who receives assets after a person dies. These can include property, assets and financial accounts. Assets that have designated beneficiaries are not affected by a will. Even if a person has a will, their estate will need to go through probate. Probate will inventory all assets and distribute them according to the will.

As you age, make sure your estate plan is updated

Estate planning is not on the minds of most Kent area residents every day because it is not something most people want to work through, as it deals with end-of-life issues. But, regardless of a family's circumstances, estate planning is important. For those who are older, updating an estate plan may be necessary.

Although everyone can benefit from the creation of a will or trust, older people have specific issues they should address in an estate plan. One of the most important is long-term care planning. The incredible amount of money that specialized nursing care costs can be detrimental to a family's life estate. Long-term care insurance, veterans benefits and qualifying for Medicaid while preserving the family's assets are all important considerations. Older people should also have a power of attorney and healthcare power of attorney designated. If there isn't a power of attorney created, the family members will need to go to court to be appointed guardian.

Estate planning to include your business

Kent area residents who own their own businesses are proud of what they have grown and cultivated. These businesses are the result of a family's hard work, and keeping them going after the owner has passed away is important.

Planning for a business succession is important. Without a plan, the business could go into bankruptcy and never recover. Creating an estate plan for a business is a way for a business to prevent this from happening and ensure it will continue for many decades to come. A business plan can help a business transition from one generation to another. For example, an estate plan can give an option for a buy-sell agreement. This is a good strategy for those businesses that have multiple owners and can allow the other owners to buy out a deceased owner's interest. It can also prevent the beneficiaries of the deceased owner from becoming unintentional owners.

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