While many people in Maryland make a point to plan ahead for their death, there are still pitfalls that could prevent their final wishes from being met. Below are some common mistakes that are made, and how to prevent them.
One pitfall some people fall into is setting up an estate plan, and then failing to revisit it. Just as a person's life situation constantly evolves, so should their estate plan. For example, a person may have more children after creating their estate plan that need to be accounted for. In other cases, significant assets could be gained, affecting one's estate plan. By revisiting their estate plan periodically, individuals can make sure they stay up-to-date.
Another pitfall is resting on one's laurels after having created a trust. It is important to remember that a revocable trust must be funded, or it essentially does not exist. This involves retitling accounts into the trust's name. It may also be a good idea to have a "pour-over" will that will funnel any assets that individual has at their death into the trust.
Some people neglect to create an estate plan at all, leaving it up to the state. They fail to consider that probate can be an expensive and public process. Having a revocable trust can help an individual avoid probate and ensure the privacy of theirheirs is preserved during what can be an emotional time.
In addition, it is important to carefully choose one's trustee. Naming a relative as a trustee can cause friction after one's death. It may in some circumstances be better to have a corporate trustee instead.
It is also very important to take into account the needs of your children. For example, one may need to provide financially for a special needs child after one's death. Similarly, one may want to make sure that their children do not receive their trust assets until they are ready to responsibly handle them.
Making an estate plan takes a lot of care. Whether one creates a revocable trust, an irrevocable trust or a will, it is important to ensure that no critical step is forgotten. It is also important to ensure that one's estate plan can evolve to meet one's changing needs. Because of this, many people choose to seek professional help when estate planning.