Horror stories abound of people who failed to plan before they passed. Many of us have either heard of – or worse yet, been close to – situations where the death of a loved one led to subsequent battles over who would raise the children, how money would be disbursed, where other assets would go and other matters. Common problems of people without an estate plan include:
- Making gifts directly to minor children instead of in a trust, so that expensive court conservatorships must be established.
- Neglecting to name guardians for minor children, which sometimes results in court fights among family members vying to be guardian.
- Not planning for disgruntled heirs or creditor problems, which skyrocket costs due to lawsuits.
- Not dealing with estranged spouses who then inherit a substantial portion of the estate – at the expense of intended heirs.
- Making outright gifts to incapacitated persons who are on Medicaid, thus making them at least temporarily ineligible for benefits.
- Trying to use “joint tenancy” forms of ownership as substitutes to wills and trusts, which could potentially result in severe tax consequences.