MISTAKES TO AVOID IN ESTATE PLANNING
- WRONG CHOICE OF TRUSTEE OR EXECUTOR
In choosing an Executor or Trustee, A Settlor or Testator has to consider the following:
- Availability of the Trustee or Executor
- Ability of the Trustee or Executor to manage funds
- Location of the Executor or Trustee
- Trustee or Executor’s knowledge of Estate and Administration Laws
- Neutrality of Executor or Trustee
- It is advised that a Trustee is a corporate body and at least one of the Executors a corporate body as well.
- FAILURE TO UPDATE ESTATE PLAN
An estate plan is not a one for all time instruments. It has to be updated regularly. Life events such as marriage, death, divorce, sale of assets, acquisition of new assets etc have to be included from time to time. Hence, updating the estate plan is imperative. Failure to update regularly may not reflect an individual’s current wishes and can cause issues in the future.
- AMBIGUITY
An estate plan must not be ambiguous, information as to trustees, executors, beneficiaries, description of asset(s) has to be clear, explicit and detailed.
- FAILURE TO PROTECT A DISABLED BENEFICIARY
If a Testator or Settlor has a beneficiary with special needs, its important to have a carefully curated estate plan tailored specifically to protect the beneficiary.
If you leave the disabled child’s inheritance to another child with the understanding that the child would help the disabled child, that child may die, get a divorce or be sued.
This could result in the inheritance not being available to the special needs beneficiary.
- DRAFTING YOUR ESTATE PLAN YOURSELF
Estate planning instruments such as wills, codicils and Trust Deed are legal documents. As such, they require expertise in drafting them. Using the DIY format is a huge mistake. This may seem like a simple and cost-effective option, but many legal and technical details must be considered when creating an estate plan. If the will is not properly executed or does not meet the legal requirements of the state, it may be deemed invalid. By working with a professional, you can ensure that your estate plan is properly drafted, executed and legally binding. With this, you have peace of mind, and you are assured that your assets will be distributed according to your wishes.
