Not too long ago a few attorneys & I got together and created the following list of mistakes Do It Yourselfers make.
- Not funding the trust
- Not signing any of the documents
- Incorrectly executing or signing the documents
- Failure to get a HIPAA release
- Omitting key provisions (e.g.,naming executor or guardian for children, no residuary clause)
- attempting to devise property that passes by law
- not taking into account statutory allowances or homestead provisions;
- including “boilerplate” A/B trust provisions, without understanding what they mean
- making retirement benefits payable to a trust that does not qualify as a ‘designated beneficiary’
- having the will witnessed, but not self-proved (not fatal, but a PITA)
- Failure to plan for special needs beneficiaries;
- Amending the documents improperly
- Not enough witnesses on documents.
- Documents don’t contain proper attestation or notary clauses
- Documents witnessed by impermissable persons.
- Will witnessed by beneficiary ( whoops, Will is OK but you don’t get anything).
- Not distributing copies appropriately
- Making irrevocable decisions which completely kill medicaid eligibility,without having LTCI or an appropriate plan
- Never funding a Trust
- Never sending Crummey letters
Other major issues:
- thinking a Will will avoid probate or taxes
- thinking that naming a guardian for children will prevent their other biological parent from getting custody
- thinking a revocable living trust protects assets from the grantor’s creditors
- Not updating the trust for decades.
- Not updating the estate plan when major life changes occur
- Never understanding why you need a Trust
- Never asking questions so you understand what you have, why you need it, and how to properly implement it. If you aren’t sure, ask again.
