Six Common Estate Planning Mistakes - Amazon Web Services€¦ · Six Common Estate Planning...
Transcript of Six Common Estate Planning Mistakes - Amazon Web Services€¦ · Six Common Estate Planning...
Six Common Estate Planning Mistakes
… and how to detect & avoid
them successfully
James E. OstensonAttorney and Counselor At Law
Five Concourse Parkway, Suite 3000Sandy Springs, Georgia 30328
(770) 392-3310
Estate Planning and Administration
I Timothy 5:8 (NIV)
• If anyone does not provide for his
relatives, and especially for his immediate
family, he has denied the faith and is
worse than an unbeliever.
Three Basic Keys to Estate Planning
• Recognizing that God owns it all and that we are to be faithful stewards of what he has entrusted to us
• Maintaining control during incapacity
• Quick & cost effective wealth transfer at death
Mistake #1
Failing to Maintain Control of Health Care Decisions
Modern Medicine: The Problem
Today 85% of all deaths occur in hospitals and nursing homes (i.e., long term care)
Modern Medicine: The Problem
Result: Longer periods where you “lack decision making capacity”
• Who will make decisions?
• Will there be family conflict?
• What types of care are desired (or not desired)?
Solution: Georgia Advance Directive for Health Care (after 7/1/2007)
• Unambiguous Chain of Command
• Detailed Enumeration of Powers Conferred
• Specific Instructions
• Understandable Statements of Intent
• Organ Donation
• Burial/Cremation Directives
• System to Assure Accessibility 24x7
• www.legaldirectives.com and
www.docubank.com
Mistake #2
Access to Medical Records – Failing to Plan for HIPAA
HIPAA – Locks Down Information
• Medical personnel face stiff penalties
• Reluctant to permit access to vital information
• Solution: HIPAA Authorizations
– In Advance Directive for Health Care –Decision Makers
– Standalone HIPPA Authorizations – Others
Mistake #3
No Plan to Control Financial & Property Matters During Incapacity
Conservatorship During Lifetime
Without appropriate legal instruments to manage
your assets during incapacity, a court
supervised conservatorship is likely
inescapable
Conservatorships = Potential Problems
• “Time-Consuming”
• “Expensive”
• “Cumbersome”
• “Creates Delays”
• “Emotionally Trying”
• “Public Record”
• “Cases of abuse go unnoticed”
Avoid Conservatorships with Living Trusts
Establishing a Trust
An individual can appoint a trustee to manage his or her financial affairs and thus can avoid the need for an appointment of a conservator
Avoid Conservatorships with Durable Powers of Attorney
Durable Power of Attorney
An individual can delegate to an agent the power to make financial transactions on his/her behalf if he is unable to do so himself/herself.
Caution – Powers of Attorney
“A power of attorney that is not well-thought out can not only be ineffective but may even be counter-productive in achieving the principal's overall objectives”
Estate Planning Journal – March 2005
Just a few important provisions …(and there are many, many more to consider)
• Providing adequate instructions
• Management provisions for retirement accounts
• Provisions for collecting governmental benefits
• Continuation of gifting programs
• Care for pets
• Power to fund trusts
• Power to make advanced funeral arrangements
• Powers regarding US Mail
Solution: “The Incapacity Duo”
Consider creating:
• Comprehensive General Durable Power of Attorney
• Revocable Living Trust to hold legal title to assets during lifetime
Mistake #4
Failure to Have a Valid Will or Living Trust
Mistake #5
Failing to Plan for Tangible Personal
Property
Family Fall-Outs: Tangible Personal Property
• Problem: No established plan for the distribution of tangible personal property
• Solution: “Personal property memorandum.” -- Clearly articulated directions, and lifetime family communications
Mistake #6
Failing to Plan for Gift Tax and Estate
Tax
Current Gift/Estate Tax Exemption
In 2016 we each have anexemption of $5.45 millionto cover large lifetimegifts and bequests at thetime of death.
The unused tax exemptionof the first spouse to die is “portable” and can be transferred to the surviving spouse and added to the surviving spouse’s exemption at the time of the second death (unless the surviving spouse remarries).
Where Do You Go From Here?
Additional Resources:
• Emergency card with access to Advance Directive
for Health Care, health care agent contact
information , primary care physician, allergies and
medical conditions
www.legaldirectives.com or
www.docubank.com
• Practical advice for settling an estate peacefully and
fairly
www.thesettlementgame.com
Thank You!
Matthew 25:21 (NIV)
His master replied, “Well
done, good and faithful
servant! You have been
faithful with a few things;
I will put you in charge
of many things. Come
and share your master's
happiness!”