The Three Biggest Senior Estate Planning Blunders
It might be shocking to learn, but the truth is that there are a variety of dangers lurking in most seniors’ estate plans. Some potential issues are relatively benign, while others are extremely costly and time consuming to fix – if they can be fixed at all. Unfortunately, the three most harmful problems are surprisingly common.
One typical flaw elder law attorneys see in seniors’ estate planning is having the wrong type of durable financial power of attorney. That is, most seniors think that their estate planning financial power of attorney will allow their agents to do whatever they need them to do, if they become incapacitated.
Regrettably, this is often not the case when seniors are in need of long-term care. The reason for this, is that a financial power of attorney focused on estate planning rather than on elder law rarely includes powers that allow agents to decant resources for Medi-Cal planning purposes. This one mis-step, has sadly bankrupted many seniors.
The second most damaging mistake that seniors make is not being vigilant in updating their estate plan. For example, creating an ongoing trust as well as nominating guardians for kids is critical for younger couples. For people in the prime of their lives, an estate plan focused on probate and conservatorship avoidance is key. But these plans typically do nothing to protect a senior’s assets from long-term care costs. Also, many couples that did estate planning over five years ago, still needlessly have AB-type trust plans which result in extra administration, headaches and costs. What’s worse is that these plans could unwittingly result in unwanted “gifts” to the government if a senior later needs help paying for care. All of this is to say nothing about changes in family dynamics that warrant alterations to an estate plan. Really, an entire book could be dedicated to highlighting the adverse effects of outdated planning.
But, by far, the biggest blunder that a senior can make when it comes to estate planning is simply ignoring it, in the first place. Addressing questions about asset protection, who gets what of our assets (and how they get it) after we are gone as well as who is in control of our financial and/or health care decisions, if we become incapacitated, is essential. The devastating effects caused by a lack of planning (or bad planning) oftentimes leads to unnecessary and costly court proceedings, higher taxes, disinherited beneficiaries and/or battles between loved ones that forever rip families apart.
For a complimentary consultation to discuss updating your estate planning, contact Randall F. Kaiden, Esq. of Valley Elder Law at 661-247-8433, or via our website: www.valleyelderlaw.la.
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