Creating a will is one of the most important things you can do, especially if you’ve accumulated substantial or unique assets. But, simply creating a will doesn’t always solve the potential problem of what happens to your assets after you pass. In fact, executing a poorly worded document can make things worse!
In my 30-year career dedicated to trusts, estates and investments, I’ve seen many properly drafted documents do exactly what the person intended. Unfortunately, I’ve also seen a few mistakes. Creating a great will or trust requires expertise and honest reflection on what the consequences might be well into the future. Of course, no one can predict everything that might happen, but with the right guidance and discussion, it’s possible to avoid some issues.
Here are a few trust and estate mistakes I’ve seen that could have been avoided. By sharing them, we hope you can learn from them and avoid them:
1. USING LANGUAGE THAT IS TOO SPECIFIC.
T I P : While some sort of specificity can be helpful in a trust, be very careful about just how specific to make it. Over time, circumstances can and will change. Unfortunately, I’ve seen issues arise that could have been easily avoided with the use of more common language that allows some discretion for the trustee.
2. PICKING THE WRONG EXECUTOR/TRUSTEE.
T I P : Most people will turn to a relative or close friend to serve as their executor or trustee. While this sounds logical, it can create issues if the person is not familiar with the responsibilities and duties involved in being a fiduciary for someone else. The choice of who will serve in this role needs to be well thought out and discussed with whoever gets chosen—especially if there are unique circumstances and family dynamics (which is the case almost every time!).
HOW TO AVOID ESTATE PLANNING MISTAKES:It is vitally important to think carefully about how a will or trust is designed. There are many items to consider, such as how the assets are titled, how the portfolios are constructed and more.
It can seem a daunting task, but in the end, you will be relieved knowing what you’ve worked so hard for will be handled effectively and in accordance with your design.
MEET THE EXPERT
Barry Prim is a Senior Client Consultant for Warren Averett Asset Management. He is responsible for building and strengthening client relationships in the Montgomery area.
Contact him at Barry.Prim@warrenaverett.com or 334-260-2340.
