Top 10 Estate Planning Mistakes a Client Can Make

Putting financial accounts into co-ownership with a non-spouse.

Banks do this all the time even when the account owner only wanted to provide someone with access, not ownership, of the account.  You should rarely consider putting someone on the deed to your property (making a gift of the property) without reviewing with a competent attorney the significant tax, Medicaid and other implications of doing so.

1

Failing to make out a durable power of attorney AND a living will (e.g. Terri Schiavo).

Results in bankruptcy will be drastically different as soon as your projected income increases due to a new job or income source.  The best time to file a bankruptcy is when your income is at its lowest level.

2

Failing to make out a new will with a lawyer (e.g., Prince!) and/or failing to destroy any old wills.

Please don't "try this at home."  I have seen wills prepared by clients using common software which have created inherent conflicts in the documents! There are very few adults who do not need a will, and it doesn't cost an arm and a leg to have an attorney do it right.

3

Failing to sign a funeral wishes declaration (Anna Nicole Smith).

In Colorado if you write down what you want done with your body (burial, cremation, etc.) it is legally binding.

4

Failing to keep beneficiary designations on accounts current.

Those expensive (and often unnecessary) trusts prepared by other attorneys to avoid probate are useless if your accounts are not payable to the trust or another beneficiary.  Even if you own real estate, a beneficiary deed prepared by an attorney for a nominal fee can keep real estate out of probate.

5

Signing an Affidavit of Common Law marriage, e.g., to get health insurance benefits.

If you are common-law married for a minute, you remain married until you go through the same formal divorce as those who were married formally.  There is no difference between a common law marriage and a formal marriage.  The rights to property in a divorce, or upon the death of a spouse, are substantial no matter how you were married.

6

Entering a second marriage (or sometimes a first marriage) without a prenuptial agreement

Your new spouse can inherit all your property, then leave it to his or her family on death - cutting your family out.

7

Failing to review your estate plan with an estate planning attorney during and after a divorce, or whenever you have children who are not old enough to handle an inheritance.

8

(a) Co-signing/guarantee of debt without REALLY thinking about it, or (b) loaning money without a proper documentation, or without considering taking collateral.

9

Retaining ownership of real estate in other states without considering a beneficiary deed in that state (if available) or a revocable trust for avoiding probate outside of Colorado.

10