Three Biggest Mistakes People Make in Estate Planning

It is estimated by Consumer Reports Magazine that almost 2 out of 3 Americans die without a will. When a person dies without a will it said that the person died intestate, which results in the state deciding how to distribute their property.

1. Failing to make an Estate Plan. There are numerous reasons why people don't create a will. The most important reason is the lack of understanding of the importance of creating a will. Most people are clueless about the significance and complexities of what happens to their property and the distribution of their property after they die and its impact on their family and loved ones. Depending on the circumstances, it may take the state years to distribute assets of an estate.

2. Attempting to draft their estate plan without a legal professional. There are many self-help legal books and business entities that instruct people that they do not need a lawyer to draft their own will and other estate planning documents. A disastrous mistake that is often made by people that rely on Do-It-Yourself planning is relying on information that is based on outdated laws. Laws are always changing and wills can be very complex, most people do not know that estate planning documents are often rejected for being poorly drafted according to state laws.

3. Failing to fund their estate. Without the ownership of assets, it is impossible to distribute property. In other words, the value of an estate is dependent upon having property to distribute property. It is proper to transfer the title of assets to the name of your estate so that those assets can be acknowledge as belonging to your estate.

Disclaimer: The information written above and found within this blog does not and is not intended to constitute legal advice, The information does not form an attorney client attorney client relationship.

Learning from the Probate Mistakes of James Brown's Estate?

How James Brown could have saved his family’s estate?

James Brown died on December 25, 2006 with an estate that should have been worth over $40 million. His advisors told him to make a will and also an irrevocable trust for his property and business assets. In truth, James Brown needed to create a living trusts because a trust would have protected and preserved James Brown’s assets for his family, which could have saved them from the costs of probate.

The definition of probate is a state court proceeding that settles the estate of a person and determines who should get their assets. As a result of probate and bad trustees, million of dollars were paid by James Brown’s estate in taxes, legal fees, appraisal fees and accountants. Worse yet, James Brown’s family may have to sue his former trustee, David Cannon for misappropriating $7 million from James Brown’s estate.

A good estate attorney could have saved his family from the headache of years of legal battles and millions of dollars paid in fees from probate proceedings. It is hard for people to understand how one of the greatest musicians and socially conscious individuals didn’t have the best attorneys and advisors to ensure his family’s security. However, this is hardly a surprise because many of us turn to the wrong people for advice.

Lessons to be learned from the estate planning of James Brown?

A good estate plan can save your family a lot of money and protect them from costly legal fees and the delays of probate. A will is only one part of a good estate plan; you may also need a living trust.

By only having a will, a probate of your estate cannot be avoided. A living trust is a legal way to pass your wealth on to your loved ones and future generations without going through probate. A living trust is a special type of trust that allows a person to control their assets while still alive and pass their assets to their loved ones upon their death.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice.

This article is an excerpt from a book, “Smartly Plan Your Estate”, written by Jomo Gamal Thomas, an attorney for J.G. Thomas & Associates, P.C. 430 West Merrick Road, Suite 22A, Valley Stream, NY 11580