Common Mistakes in Do-It-Yourself (DIY) Estate Planning

DIY Estate Planning for Family

There are many DIY estate planning tools and forms available for a small fee. The companies that offer them will let you believe it is simple to draft your own will or trust without an attorney.

That may be true for some well-versed in estate planning and probate law, or those with few assets to protect. However, there are some pitfalls to avoid if you are attempting DIY estate planning for a more complex estate.

Alternate Agents, Executors or Trustees


When you name an agent for a power of attorney, or an executor or trustee to administer your estate assets, don’t forget to also name an alternate. If for some reason your original choice were not available, having an alternate prevents the need for court to appoint one.

Beneficiary Designations for Insurance Policies


It is easy to forget about insurance policies that may have beneficiaries that are different from those in your estate plan. Those named in the policy will receive funds outside of probate or trust administration, unless they are changed to line up with the estate plan. One alternative is to name your trust as beneficiary of the policy.

Minors as Beneficiaries


A minor under 18 years of age cannot directly receive property from an estate, and any gift would require the appointment of a guardian. To avoid this, a trustee or custodian should be named to oversee the property on behalf of the child.

Funding Your Trust


Once you have your trust drafted, there is one more step which is ‘funding’ the trust. This has to happen during your lifetime, and many types of assets must be re-titled in the trust name. Otherwise, all of your assets will have to go through probate, and the trust will have virtually no effect.

Reviewing the Estate Plan When Laws Change


You cannot really draft a will or trust and put it in the drawer and forget about it. Every year, state and federal laws change which could affect your estate plan. This includes tax laws and probate rules which could have an impact on how the estate is administered and distributed.

Did you make a DIY estate plan?


If you drafted your own will or trust, then you may want to review it and make sure it is up to date and complete. Those with significant life changes, increased assets or new family members may need more than a DIY approach at this point.

If you have questions about estate planning and if you need more guidance please contact the estate planning attorneys at Sudden Wealth Protection Law.

ABOUT THE AUTHOR

Founding attorney Paul Deloughery has been an attorney since 1998, became a Certified Family Wealth Advisor. He is also the founder of Sudden Wealth Protection Law.

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