The talented Heath Ledger, who remains the best actor ever to play the role of The Joker (at least in our opinion), unexpectedly passed away in 2008. In the wake of this death, his family, including his parents, his young daughter, and his former partner, actress Michelle Williams, found themselves navigating a thorny situation:
As it stood, half of his estate was set to go to his two sisters and the remainder to his parents after his debts were settled. There were no provisions for either his daughter or his former partner.
Ultimately, the question of Ledger’s estate was resolved out of court, with his family gifting assets to his daughter. But it shows that, without diligent planning, estate planning mistakes can happen—and it pays to get ahead of them.
Neglecting to update your estate plan
Life goes on even after you’ve crafted your estate plan. Marriage, divorce, having a child, moving, selling property, changing jobs, inheritances—just to list a few.
But does your estate plan reflect those changes?
An up-to-date estate plan is one of the most basic—and most important—steps to take when protecting your assets, your legacy, and your estate plan more broadly. You should plan on regular estate check-ups with your attorney to make sure your documents and beneficiary designations are in alignment.
Overlooking the need to plan for long-term care
When you think about estate planning, you shouldn’t only focus on your legacy and how your beneficiaries will divide your assets.
A comprehensive estate plan should also include your plans for long-term care. Currently, the cost of long-term care in Texas is $76,650 per year—a high cost for many families unless they have a solid plan in place to mitigate the expenses. However, an experienced estate planning attorney can work with you to ensure you protect your assets, obtain Medicaid benefits, and navigate long-term care needs.
You should also consider what will happen should you become incapacitated or unable to make decisions about your well-being. If you don’t, your loved ones will have to navigate complex elder law issues they might not be prepared for, adding extra stress and financial burden to the situation.
Establishing durable powers of attorney can relieve some of this stress. An experienced estate planning attorney can help you ensure your powers of attorney are in proper order. Texas has quite a few options for powers of attorney, including:
- Durable Power of Attorney
- Medical Power of Attorney
- General Power of Attorney
- Limited Power of Attorney
- Springing Power of Attorney
- Business Operations Power of Attorney
- Professional Practice Power of Attorney
Ignoring digital assets
Another common estate planning mistake is forgetting about your digital assets. What is a digital asset? Examples include:
- Your websites
- Brand logos
- Audiovisual media
- Word documents
- Digital paintings
- Social media accounts
- Online banking
- Cryptocurrency, security tokens, and NFTs
And this list is just the tip of the iceberg for digital formats—certainly more will arise in the years to come. Since these hold some form of value—either financial or sentimental—they should be part of your estate planning considerations.
Naming a minor as a beneficiary
Leaving assets to a minor without an appointed guardian managing those funds can be a serious misstep in estate planning. Without the appropriate provisions in place, it can lead to the expenditure of tens of thousands of dollars in legal fees to name a guardian, as well as a trustee to manage the estate of the minor.
Without the appropriate considerations, your family may be left sorting out legal issues. Your life insurance policy may not pay out until the court appoints someone to manage the assets in question. Further, if this child has special needs, appointing them a beneficiary can risk their eligibility for benefits like specialized medical care, education, or financial support. At SMC ESQ PLLC, we include special provisions for supplemental or special needs if an unknown beneficiary should require them.
Before leaving a significant inheritance to your minor children or family member, you should always consult with a Texas estate planning attorney. They can help you determine the most suitable person to act as trustee of these designated assets and protect against:
- Poor financial choices and spending habits
Whether you choose to hold these assets in a living trust or one that’s revocable upon your death will depend on your goals and the legacy you wish to create.
Failing to create an estate plan
“Good fortune is what happens when opportunity meets with planning.”
Just 33.1% of adults in the US have started some form of estate planning—but the rest, well, they haven’t. And if you think that statistic represents only everyday people, think again. Prince himself died without a will in place, leaving a $156 million dollar estate up in the air.
Whether you’re a legendary pop star or not, there are significant consequences of not creating an estate plan:
- Lack of control over your legacy
- Disputes over inheritance
- No control over medical care and financial affairs if you become incapacitated
- Delays and issues due to probate court
- And more
We’d like to call out, in particular, the impact of not having control over your legacy. A well-implemented estate plan lets you decide what’s important to you, how you want decisions made, and what support you’d like your family to receive.
The good news is that this is entirely avoidable. If you haven’t yet started your estate plan or haven’t updated it to reflect your current circumstances in life, a Texas estate planning attorney can help.
Failing to properly fund your estate plan
Not funding your estate plan can throw a wrench in the works. You need more than just estate planning documents. Everything needs to be properly titled when you buy new real estate or open new accounts. Without this in place, you and your beneficiaries won’t see the benefits of the trusts.
Generally speaking, people think that a will is good enough, but keep in mind that in Texas, a will has no validity until it’s probated, and the average cost of probating an estate is $5000-7000 dollars—in an uncontested case.
Failing to understand your documents and how they are implemented is a big problem in the estate planning world. Your plan should be customized to you, and it should include strategies for keeping everything fully funded over time. Working with an estate planning attorney that builds long-term relationships with clients can help you ensure that your estate plan works as intended.
At SMC ESQ PLLC, our legal team focuses on more than just what happens after you pass away. We help you create a plan to thoroughly protect your assets while also prioritizing your goals for long-term care and end-of-life needs.
Contact our firm today to schedule your consultation and begin safeguarding your legacy.