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Lessons Learned From 2015

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Posted on Jan 29, 2016 | Share this post: Like Us on Facebook Join Us on Google Follow Us on Twitter

Every year, we survey the Bogutz & Gordon staff and compile ten lessons we learned from our experiences (supplemented by the rumor mill) that could help all of us plan a bit better.  In no particular order:

  1. Think carefully about whom you name to handle your affairs when you die. You may absolutely trust the person you name as successor trustee or personal representative, but if the OTHER BENEFICIARIES/HEIRS don’t trust him/her, it can tear a family apart.  If there’s a possibility for acrimony, consider a neutral party.
  1. Review your current documents. Are there any blanks that appear to need signatures or initials?  Any typographical errors in important places (like names on deeds)?  If so, check with your estate planning attorney.  They can determine whether the abnormality is legally significant, and, if so, can help fix it.
  1. Make sure you have alternates for your powers of attorney, trustees, and personal representatives. Think carefully about what would happen if your first nominations for those important roles are unable to serve.  Often, it could mean an unnecessary court proceeding, which costs both time and money.
  1. Also, make sure you have contingent beneficiaries. Consider what would happen if the people or charities you have chosen die or dissolve before you die and you don’t have time to update your documents.  If you build in a back-up plan from the start, you won’t have to make changes.
  1. If you revoke a trust or a Will that includes a testamentary trust, remember to also correct all of your beneficiary designations that had named the testamentary trust.
  1. Don’t rely on a prepaid cremation plan alone. You also may need to formally express your desire for cremation or designate someone to make the decision.  Read your documents to see if your health care power of attorney or other document includes this power.  If none of your documents spell this out, your estate planning attorney can add language or create a separate document.
  1. If a loved one is running out of money, consider a consultation with an elder law attorney about ALTCS (the Arizona Long Term Care System) BEFORE every last cent is gone and BEFORE you get a reverse mortgage or make some other drastic financial commitment.
  1. Consider including lifetime lending and gifting in your estate plan. If you make loans or gifts to your eventual heirs, think about whether your generosity should change the distribution under your plan.  In the end, do you want everyone to be equal?  If so, you should include that desire explicitly in your documents.  Finally, consider the loss of a step up in income tax basis on assets that are gifted during lifetime rather than held until death and then transferred to the beneficiaries.  Gifts can also affect long term care eligibility.
  1. If you have a trust, make sure there’s something in it. If you want a given asset to be distributed according to the trust, it has to get into the trust’s name, either now or when you die. Check your bank account titling, deeds, and beneficiary designations.  If you have doubts about what to do, ask your estate planning attorney for guidance.
  2. We’ll say it every year:  Revisit ALL beneficiary designations to ensure they match your wishes.