Top 20 estate planning mistakes baby boomers make

There’s lots to consider when deciding how to distribute your assets.

Having the right estate planning documents in place will give you peace of mind that your wishes and intentions will be achieved when you die or are no longer able to manage your own affairs due to mental incapacity. It will also save your family and loved ones the headache and heart-ache of dealing with messy affairs after you are gone.

Unfortunately, we know many people who have made mistakes or assumptions that have lead to these issues.

Further reading: how to pay for your grandchildren’s school fees tax-free

These are the top 20 most frequent estate planning mistakes made by baby boomers – and some advice on how to get clarity on your plan.

1) Forgetting to review the will and other estate planning documents regularly (every 1-2 years) or after a change in circumstances.

There are many changes that can take place within a family or business structure, such as births, deaths, divorces, and new property acquisitions. Therefore, to ensure the assets you leave behind are given to those you intend, it is wise to perform a periodic update of your will when these changes take place.

This is particularly important for blended families (with children from different marriages) or larger families. A new child should mean a new will!

2) Forgetting to make powers of attorney.

There may come a time when you lose the full capacity to make important personal, business or medical decisions independently. It’s therefore crucial to plan for this possibility, by appointing one or more powers of attorney.

Everyone has assets worth protecting; whether they are bank accounts, property, shares, or personal items. Beyond that, health and medical concerns necessitate that a person be given the power to make decisions based on your interests, needs and wishes. 

Further reading: Top three tips for a healthy will

3) Not making a new will and other estate planning documents after a relationship break-down/separation (see case study: how to inadvertently leave money to your ex).

4) Assuming that the will covers superannuation assets
It doesn’t unless you have made a binding death benefit nomination specifying that it does.

5) Thinking that the will covers assets jointly held, such as joint bank accounts or jointly held property.

6) Not titling assets correctly to accord with your estate planning wishes (eg property held jointly vs tenants in common).

7) Assuming that the will covers life insurance proceeds.

8) Thinking that testamentary trusts are only for complex or large estates.

9) Failing to take into account loans made to children.

10) Forgetting about overseas assets.

11) Failing to appoint alternative people to key roles, such as executor, trustee, testamentary guardian for minor children and attorney.

12) Not realising that assets held in a trust or company cannot be disposed of by a will.

13) Not taking advantage of the benefits of special disability trusts when providing for beneficiaries on disability support pensions.

14) Not taking advantage of the benefits of testamentary trusts for beneficiaries at risk of relationship breakdown, actions from creditors or financial immaturity.

15) Failing to take into account the risks of a family provision claim.

16) Failing to plan for business assets or to take account of other documents such as partnership agreements and shareholder agreements.

17) Failing to realise the need to review trust deeds and successor trustee provisions.

18) Forgetting about binding death benefit nominations for super.

19) Failing to realise that making binding death benefit nominations for SMSF’s is not all that is required.

You can see that there are a lot of assumptions that lead to life-changing mistakes for families if you don’t take the time to properly plan out your will.

This is particularly important for blended families and those who have assets in multiple structures (eg companies, trusts and self-managed super).

Bayside Wills and Estates can help you create an estate plan that meets your wishes and can give you peace of mind for your family. Contact us for an appointment here.

*This article is not intended to be legal advice. Individual circumstances vary and you should seek legal advice about your own individual circumstances from an estate planning lawyer.

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