While the idea of do-it-yourself estate planning may be tempting, the risks of things going wrong more than outweigh any potential savings.
What may seem like a reasonable estate plan at the present moment may end up becoming unreasonable over time. If a person decides to create their own will by dividing what seem like equally valuable assets now to various beneficiaries, there is no guarantee that those assets will retain the same relative value over time. Real property and stock holdings may gain or lose value at vastly different rates. Additionally if a person’s property changes, then the entire distribution plan may be obsolete.
One possibility that a currently healthy person may fail to account for is the potential of unexpected medical, long-term care, or care facility costs. It may become necessary for a person to spend money or sell assets they originally intended to pass on in order to pay for their own expenses. If this occurs, a poorly written distribution plan may unintentionally disinherit potential beneficiaries simply through changed circumstances. By the time these changed circumstances occur, a person may have lost the mental capacity to realize that their static estate plan is out of date.
Any significant change in relative value of assets or composition of assets could result a legal battle between a person’s beneficiaries in an attempt to determine what was the intent of the person who originally wrote the will. A judge may have to decide the following: was it really the intent of the person making the will to give only specific assets to specific beneficiaries or was the distribution plan really an attempt to give percentage shares of the estate to all the beneficiaries? If it comes down to a court battle, a person’s beneficiaries would almost certainly spend far more on legal expenses fighting over their inheritance than the person who made the will “saved” by not using an elder law attorney.
The possibility of estate taxes is another area where an amateur plan may run into problems for a person’s beneficiaries. A plan properly written by an elder law attorney can often minimize, if not eliminate, a person’s estate tax burden. A plan that fails to take into account how the estate tax works could end up needlessly costing a person’s beneficiaries a significant portion of their inheritance.
The benefit of using an elder law attorney comes down to ensuring that a person’s estate plan will actually do what a person wants it to do. First, there is the peace of mind of knowing that all of their estate planning documents are legally valid. State law generally requires that wills meet certain requirements before they become legally valid. Often times, these requirements go well beyond a mere signature at the end of a document. These requirements can vary by state, so it is important that a person uses a local elder law attorney to make sure that any estate planning documents are valid. An elder law attorney can also help guide a person through the advantages and disadvantages of various planning tools that go beyond mere forms to make sure that a person’s estate plan can deal with future changes in financial and familial circumstances.
Even in the simplest possible case, namely a single person with limited assets and a single beneficiary, there is a significant advantage to using an elder law attorney to prepare an estate plan. A modest estate presents the challenge of making sure that estate assets are not eaten up by unnecessary expenses for either the person making the estate plan or their beneficiary. An elder law attorney can make sure to create an estate plan that minimizes costs, in terms of both time and money, for all parties involved.
To create an estate plan that meets your needs please call Martha C. Brown & Associates at (314) 962-0186.