Some Estate Planning mistakes won’t cause you a problem, as you won’t be around to suffer the consequences. That problem will be for those left behind. But some WILL seriously affect you, personally.So run through our brief checklist, and see if you have reasonable precautions in place. If not, feel free to contact our professional services department on 03 300 102 300 – we can direct you to suitable solutions, though we ourselves can’t give specific advice, we know those who can. (Click for our general page on Contentious Probate.)
Common Legal Estate Planning Mistakes:
1) Getting married/ civil registered
and not realising you have cancelled your Last Will and testament and (in most cases) left everything to your new spouse. This is REALLY common and can be avoided if you know you are getting married at the time the Will is made.Getting your estate planning right is absolutely crucial where there are children and second or third relationships involved – too often the children end up with nothing, which was not generally the initial intention. It just happens through careless planning or the children falling out with the survivor, who then cuts them out.OR Not getting married and having an Inheritance Tax bill to add to the other troubles, never mind the consequences of not having a Will.All of this can be avoided with sensible planning and sound advice.
2) Leaving money with private instructions to donate to charity.
They may decide to keep the money, or they may have to pay a large amount of unnecessary Inheritance Tax. Or they might be bankrupt at the time and lose the lot, or be getting divorced and lose half of it!
3) The most common Estate Planning mistake of all.
Sorting everything out properly, then assuming it will work forever, despite constantly changing family, tax and legal circumstances. This is madness: things change all the time, and if you want to find a way of keeping things under review, go here.
4) Give your home to your children.
Another common one which is dangerous in the extreme – similar issues to 3 above. There are ways of improving the situation see here for one example.
5) Not take precautions against an accident, or ill health.
and not being able to cope. Do you REALLY want social workers to take over your life? That is what usually happens in these circumstances unless the family are brave enough to go through the Court of Protection. Find out about Lasting Powers of Attorney here. Most of us will have to ask our partner or children to manage some of our affairs at some time, so why not be organised, decide whom YOU want to appoint and make things simple?
6) Ignore your Grandchildren.
Wills almost always leave money to the children, who may or may not need it. They might spend it on luxury holidays, which is very nice. But might it not be better used to help grandchildren directly, rather than potentially creating a larger tax bill if your children pass it on?
7) Ignore people who perhaps should be (at least) considered.
This is another one beloved of Contentious Probate Lawyers. Ignore the ex-wife, or one of your children, or someone you have some financial responsibility for, or have treated as a child of the family. Mouth-watering legal fees are on offer to lawyers who dig out these people and persuade them to make claims. Excluding anyone should be an advised decision, with the reasons properly recorded – as the main witness, you won’t be around to testify in Court, so make sure the paper trail is.
8) Having Lost Assets
So you could accidentally commit Benefits Fraud, or get your, Executors, into trouble! Consider an Asset Search if your memory is like mine!Need help? Contact our Estate Planning Contacts division.