Securing The Family Future

A thoughtful and well-communicated estate plan is an important way to secure a family’s future, ensuring hard-earned savings and assets are protected and passed efficiently to the next generation. Unfortunately, failing to plan, or making common mistakes, can result in estate disputes that not only waste money, but also strain or even end relationships. Read on for common estate planning pitfalls, and advice about avoiding them. 

Common Estate Planning Mistakes To Avoid

As Chelsea Brown of Warner, Norcross and Judd, aptly observes, most of us work hard to earn and save throughout our lifetimes, and if we have the opportunity to pass unspent assets on to the next generation, we certainly don’t want money wasted, and relationships destroyed in an estate contest: “Perhaps more important than the financial cost of an estate contest is the emotional cost. Few events can fracture a family more deeply than a contested estate – potentially leading to years of emotional strain and irreparable damage to relationships … .Proactive estate planning is not just about asset transfer. It’s about peace of mind, protecting family harmony, preserving legacy and minimizing exposure to legal risk.” According to Brown, early planning, and proactive open discussion about intentions, are among the most important steps we can all take to prevent problems in the face of capacity decline, and ultimately, death: 

“Open discussions with family members about the reasons behind your estate decisions can prevent feelings of surprise or resentment later. Silence or secrecy often creates suspicion, especially when distributions appear uneven or unexpected.” 

In addition to securing experienced, professional advice to ensure your arrangements carefully attend to your goals and circumstances and are clearly communicated to loved ones, Brown also suggests preventing estate problems down the road by following these planning tips:

• Combat Claims of Incapacity or Undue Influence: To avoid such claims, create your estate plan while you are of sound mind. Engage with and execute your documents in front of independent witnesses who can attest to your understanding. Meet with your attorney and other professionals alone to ensure that you are free from outside influence….
• Consider No-Contest Clauses…: A “no-contest” or in terrorem clause can discourage litigation by penalizing beneficiaries who challenge your estate plan…..These clauses must be crafted carefully. Your attorney can help evaluate whether a no-contest provision aligns with your objectives.
• Review and Update Regularly: Life changes — and so should your estate plan….Failing to update your documents may unintentionally exclude beneficiaries or contradict your current wishes. A regular review (every two to three years or sooner after major life events) ensures consistency across your will, trusts and powers of attorney. 

Take Fiduciary Designations Seriously

Although sometimes treated as an afterthought, the appointment of the fiduciaries entrusted to administer an estate plan is actually one of the most important decisions we make. Afterall, our fiduciaries have the ultimate responsibility for ensuring that our intentions are carefully carried out. Depending on location, circumstance and the details of plans, fiduciaries may be referred to by a variety of terms, such as personal representative or trustee. Regardless of the nomenclature, fiduciaries have a legal responsibility to put the affairs of the estate and its beneficiaries ahead of personal interests. Fiduciaries must always carry out their duties with loyalty, care, good faith, confidentiality and prudence.

When it comes to selecting fiduciaries, it’s common to name a relative or friend, though keep in mind that sometimes designating a professional fiduciary makes the most sense. As Brown explains: “Appointing the right personal representative, trustee or agent under a power of attorney is as critical as drafting the plan itself. These individuals should not only be trustworthy but also capable of managing complex family dynamics. In some cases, appointing a professional fiduciary or corporate trustee may be the best option to maintain neutrality, especially where family relationships are strained or assets are substantial.”

All fiduciaries have significant, legally binding responsibilities, so a type of bond, generally referred to as a fiduciary bond, may be required. A fiduciary bond serves as a guarantee that duties will be carried out in accordance with the law, and in the best interests of beneficiaries. Colonial Surety Company makes it easy and speedy for fiduciaries in every state to obtain their bonds: simply: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere.

Personal Representative and Fiduciary Bonds Here

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