Can I make my own estate plan?
Here’s the short answer, don’t do it. This is a common question, and while it is possible to make your own estate plan, it is very complex, and there will be holes. You could Google “how to write a will” but whatever blog article comes up, it won’t be a proper will and it won’t help your estate plan.
But isn’t it possible to create an estate plan from scratch in a matter of minutes? What about a transfer-on-death deed for my land or adding my kids to my bank account? Again, you can, although it would be comparable to playing high-stakes poker with zero knowledge of the game.
It’s just not a good idea. For the plan to work as you want it to, it should account for plenty of complications and the smallest details. If you become disabled, a good plan protects your spouse and children from losing valuable government benefits.
Your plan should avoid the delay and expense of probate court. It should protect money from children’s creditors or divorce, or remarriage. You must craft your plan to maintain family harmony and help avoid disputes between children as joint owners. Even a relatively simple situation involves many moving parts.
Your plan shouldn’t be “one and done.” Internet documents, joint-ownership devices, or the use of “document assist” companies will not do the job. Also, assembling the moving parts to work smoothly is just the first step. Your estate plan needs maintenance, too, just like your car has a “check engine” light. Significant family events like severe illness or death, marriage, birth, or financial reversals are signals that you should tune up your plan to reflect those changes.
ALREADY HAVE AN ESTATE PLAN?
Are you concerned that your existing estate plan is valid, up to date, and will serve its intended purpose? I am often asked to review existing estate plans. I am shocked by the number of individuals who have had these critical documents prepared incorrectly by non-attorneys, “document assist” companies, or online services. Often these “one-size-fits-all” forms will fail because they:
- Are missing necessary provisions.
- Are out of date.
- Contain unnecessarily complex provisions, especially in light of the dramatic changes to the Federal Estate Tax system.
- Have not been adequately implemented and/or “funded,” which may lead to Probate.
- Contain provisions that will ultimately lead to conflict and expensive court challenges.
Here are some common, potentially dangerous scenarios that repeatedly lead to disastrous results. Please review them and see if any apply to your situation. Suppose your estate plan was prepared by an experienced estate planning attorney with whom you maintain a relationship. In that case, we urge you to consult with them about the issues raised in this blog article. If that is not your situation (i.e., your attorney is unavailable to you, or you have no one to turn to for a productive conversation about this important subject), then I invite you to come in for a Free Estate Plan Review.
1. Avoid “TRUST MILLS”
Did you purchase a living trust from an organization you thought was a law firm? These people and companies sell inappropriate annuities and similar investments, most often to senior citizens. Under the pretext of preparing your estate plan, salespeople from these companies obtain your personal financial information to advance their hidden agenda. Here’s how a “trust mill” works.
According to the California Attorney General:
“To give themselves a cloak of legitimacy, these sales agents pretend to be experts in living trusts. In their solicitations, these sales agents often pose as expert financial or estate planners. They pass themselves off as a “trust advisor,” “senior estate planner” or “paralegal,” and schedule an initial appointment with seniors in their homes. They sometimes work in assisted living centers, churches and other places where seniors gather, hooking elderly victims through free seminars and other sales presentations. Seniors pay substantial sums of money to sales agents for living trusts, but sometimes, through fraud and deceit, the sales agents damage seniors’ estate plans and the security of their investments and life savings. Planning an estate and choosing investments involve important legal, financial, and personal decisions. If estate planning documents are not properly prepared or executed they can be invalid and cause lasting damage.”
If this sounds familiar, you should be concerned. View the California Attorney General’s full warning involving Trust Mills here. If you have reason to believe that your estate plan was prepared by one of these companies, or if you’re uncertain about the origin of your documents, schedule a free consultation with me.
2. FEDERAL ESTATE TAX COMPLIANCE
There have been significant changes to the Federal Estate and Gift Tax laws. Suppose you prepared your documents under the old system. In that case, they may be out of date and likely contain overly complicated and burdensome provisions, especially if you were married or were married when your documents were prepared. The good news is that very few estates will be subject to tax liability under the new system of regulations. You should review your plan to determine if it needs to be amended in light of the new estate tax system.
3. LACK OF LONG-TERM CARE COMPLIANCE
The primary goal of long-term care estate planning is to protect, preserve and manage your estate if you are not well. Why is long-term care estate planning so important? Because it allows you to accomplish several crucial objectives:
- Be able to maximize your ability to preserve your estate for you and your loved ones during a medical crisis.
- Help ensure that your money and other assets go to the chosen people without requiring your estate to go through Probate.
- Defuse potential conflicts over managing your affairs if you become disabled by having a properly drafted Advance Health Care Directive.
What You Can Do For Your Estate Plan
Planning for long-term care can involve complex evaluations and may require extensive estate planning, either in the form of modifications to your existing documents or the creation of new documents. Who will pay for it if you need long-term care because of a chronic physical condition such as arthritis or Parkinson’s disease or a degenerative mental disease such as Alzheimer’s? The answer is probably you unless you take steps to protect yourself.
Long-term care is usually not covered under health, disability, or Medicare supplemental insurance policies. Medi-Cal may be an option to pay for your costs of care. Due to the high costs of nursing home care, a majority of California’s nursing home residents have part or all of their care paid for by the Medi-Cal program at some point.
It takes expertise to coordinate the various strategies available. Don’t risk a result that will cause your family problems and unnecessary expense. Call me to create a plan that harmonizes the moving parts so that the gears will work together and you will leave behind the legacy you intended. I hope you found this article helpful. Please contact me at 833-677-3737 to schedule a free consultation to discuss your legal matters.
Thanks for reading.
Christopher E. Botti, Esq., Chief Preservation Officer and Certified Specialist in Estate Planning, Trust and Probate Law
All legal services are provided by Botti & Morison Estate Planning Attorneys, Ltd.