A common misconception is that estate plans are only for the rich. In reality, every American could benefit from creating an estate plan. An estate plan not only dictates the disposition of your assets at death but also who will manage your assets and make medical decisions in case of your incapacity. Making careful, educated decisions will help protect the best interests of you and your family, during your life, in case of your incapacity, and after you pass away.
Estate plans go beyond a simple will and can be complex at times. Our highly experienced Colorado Springs estate planning lawyers will work with you to create an appropriate plan for your unique situation. Below, you’ll find five common estate planning mistakes that you should avoid.
1. Failing to Create an Estate Plan
One of the most common estate planning mistakes that people make is failing to create a plan at all. Many Americans do not have the appropriate estate planning documents in place. Some surveys have reported that as many as 6 out of 10 Americans do not have their end of life financial affairs in order.
There are many understandable reasons behind these statistics. Death is a tough subject that many people want to avoid thinking about entirely. Even if individuals understand the importance of estate planning, they tend to procrastinate. Additionally, some people simply feel uncomfortable discussing their finances and other personal information.
Despite these reservations, it’s important to take estate planning seriously. Creating an estate plan is one of the best things you can do to ensure your personal and financial affairs are handled according to your wishes.
2. Not Updating Your Estate Plan
It’s common for your life to change after you create your estate plan. If you do not periodically adjust your estate plan to account for these changes, it will not reflect your current situation or preferences.
A few common reasons to update a will include:
- Divorce or remarriage
- Health changes
- Substantial changes in assets
- Changes in tax laws
- Changes in your location
3. Not Establishing a Trust
Trusts are flexible and versatile estate planning tools. A trust is typically used to minimize estate taxes and to avoid a conservatorship and probate. Often integral to a comprehensive estate plan, a trust gives you control of your assets and helps you protect your legacy.
There are many types of trusts. In general, trusts are either revocable or irrevocable. A trust can be created under a will after your death (testamentary trust) or during your lifetime (intervivos trust).
Also known as a living trust, a revocable intervivos trust is flexible and keeps you in control of your assets while you are alive. Irrevocable trusts typically transfer your assets out of your estate, after which you do not have control of them. As the name suggests, an irrevocable trust cannot be easily changed or terminated.
4. Ignoring Beneficial Medicaid or VA Pension Opportunities
When planning your estate, it is crucial to think about how you will pay for long term care expenses and other medical costs. You may be surprised to hear that the average cost for a private room in a skilled nursing facility in Colorado is over $8,000 a month. Thankfully, there are several options that may be able to help you afford those costs.
Medicaid is a federal program that provides assistance with long term care expenses. Our attorneys can help you with every stage of the Medicaid planning process. This involves protecting your assets while helping you qualify for the program.
Often overlooked, the VA Pension beenfit, also known as Aid & Attendance, can provide a monthly financial benefit to qualifying veterans or their surviving spouse. Our lawyers will work with you to find out if you are eligible for a VA pension.
5. Not Contacting an Experienced Estate Planning Attorney
It is vital to work with an experienced, detail-oriented estate planning attorney. The highly skilled team at Leventhal Lewis is proud to guide you through this process.
Our attorneys can assist with matters such as:
- Financial and Medical Powers of Attorney
- Asset protection
- Estate administration
- Special needs planning
- Probate litigation
Arrange a Free With Our Colorado Springs Estate Planning Lawyers
Call 719-694-3000 today to learn how the talented attorneys at Leventhal Lewis can help you create or modify your estate plan. We proudly serve the Colorado Springs, Pueblo, and Castle Rock areas of Colorado.