Ten Serious Mistakes to Avoid in Estate Planning

3. Failing to Write a Will or To Have a Revocable Trust At All.

Suppose a man dies leaving a wife and two children. In New York, the estate does not automatically pass to the surviving spouse. Instead, the surviving spouse will receive the first $50,000 plus ½ of the rest of the estate, and the two children will each receive ¼ of what is left. This precludes good tax planning. It also puts assets into the hands of children who may be too young, irresponsible, or suffer from addictions or creditor problems to receive property outright (see #5, below). In short, a mess.

While property, like bank accounts with beneficiary designations, life insurance with named beneficiaries, and real estate owned by husbands and wives will not be affected by a will (or the failure to write one), usually a person has enough assets that do not pass by operation of law for the default of intestacy to be inappropriate and undesirable in most cases.

At the very least, you owe it to yourselves and your families to sit down with an estate planning professional and see whether intestacy plus your beneficiary designations will suffice (in almost every case, it will not).

On top of that, if you have minor children, you should have a will to appoint guardians for your children if you and your spouse die before they turn 18. If you do not choose guardians yourself, you can almost be assured that members of your family will fight over this, creating emotional and financial turmoil for your children at the worst possible time.

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