Many of us have thought about and initiated plans for what will happen with our assets when we pass. However, it is important to consider whether those plans have unintended consequences. In this blog, we break down some of the most common estate planning mistakes that we see in the office and why hiring an experienced estate planning attorney can help catch these mistakes, fix them, or avoid them all together.
Naming Minors as a Direct Beneficiary of a Financial Account
Naming a minor child as a direct Payable On Death (POD) beneficiary of a financial account or as an insurance beneficiary could result in the money either going directly to the child’s guardian, or to the child the minute , he or she turns 18. Many 18-year-olds who come into large sums of money spend it in ways that may not be in their best interest or a child’s guardian may not be the person you want controlling the money either (i.e. divorced spouses). Parents or grandparents of minors should consider other estate planning tools, such as a trust, to avoid this situation.
Adding a Child as a Joint User to a Bank Account
Aging parents often find it advantageous to add one of their grown children to their bank accounts as a co-owner/ joint user so that their child can handle their finances. When the aging parent passes, the child on the bank account now owns those funds 100%. Parents with multiple children may not have anticipated this or assumed that the child would voluntarily share the funds with their siblings. In most cases, the child on the bank account does not share the funds with their siblings, and legally, they have no obligation to do so. Even if that child were to share the funds, unintended gift tax consequences can arise. Aging parents in this situation should consider using a Financial Power of Attorney to allow a child to manage their finances during their lifetime.
Improper Spousal Ownership of Real Estate
What happens in Wisconsin to real estate when one spouse passes? Does the surviving spouse automatically own the real estate? The answer lies in the way the spouses took ownership on the deed and the type of real estate owned. Simply having both spouses listed on the deed as owners (such as “Jack Doe and Jane Doe”) is not enough to avoid probate in most cases. Special consideration must be taken when titling real estate to ensure that a probate is not required between the spouses when one spouse passes. Having an attorney review your deed and fix any unintended titling mistakes can help prevent costly mistakes that can arise with what is often our biggest asset – the home! An attorney can also advise on options for passing down real estate when both spouses pass and common mistakes that can arise with these transfers and how to avoid them.
Schedule a consultation with Wynn at Law, LLC today to discuss the estate planning process
Whether you already have an estate plan in place and need to review it, or you would like to start from scratch, our attorneys are here to assist you. Contact Wynn at Law, LLC today for a consultation at 262-725-0175 or visit our website’s contact page. Wynn at Law, LLC is based in Southern Wisconsin and has offices conveniently located in Salem, Delavan, and Lake Geneva, Wisconsin.
