We don’t know whether or not any particular assets that we own now are still going to be a part of what we own when we die. Planning around these specific assets could potentially prove disadvantageous and conflict with what our true intentions are in our estate plan.
In this Estate Planning Minute, Wes Coulson discusses another common estate planning mistake and the danger of trying to construct an estate plan around specific assets.
Common Estate Planning Mistake #3: Trying to plan an Estate around specific assets
Hi, I’m Wes Coulson and this is your Estate Planning Minute. This is another in our series on Common Estate Planning Mistakes. What I want to talk to you about today is the danger and lack of wisdom of trying to construct an Estate Plan around specific assets. Let me give you an example.
I had somebody who said, “Well, I don’t need an estate plan. I’ve got, in addition to a little bit money on the side, I’ve got five $50,000 CDs, and I’ve got five children, and I’ve got them as ‘Payable on Death,’ one to each child. Don’t need a Will, don’t need anything, each of them is going to get their $50,000.”
But, then I ask him, “Okay, what if you need to go into a nursing home or you have some other need to spend the money. What are you going to do then?”
“Well, I guess I’d have to cash in one of the CDs.”
“Okay, so how are you going to decide which one of your children is not going to have their inheritance anymore?”
And therein lies the danger of talking about specific assets rather than shares. You don’t know, by the time you die, whether any particular asset that you own now is still going to be part of what you own then. Thanks.
For more about Estate Planning, visit these articles:
- Safeguarding Your Estate Plan
- What’s the Difference Between Estate Planning and Asset Preservation Planning?
- Misconceptions About Wills
- Wills, Living Trusts and Powers of Attorney: How often should they be updated?
- Common Estate Planning Mistake: Failing to appreciate how assets pass upon death
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