Are you a DIYer? Do you like to make your own repairs in your home, change the oil in your car or hang up your own wallpaper? If the answer is yes, good for you! However, does this do-it-yourself mindset also include estate planning? It may seem like a fine idea because after all it is better to DIY an estate plan than to not have an estate plan at all, right? Unfortunately, the answer is often no. We would like to share with you what might happen if you decide to write your own estate plan without seeking counsel from a qualified Florida estate planning attorney.
If the DIY estate plan you write is unclear or against legal statutes your heirs could end up in probate court with a judge making decisions on what happens to your estate. In addition, your heirs could be stuck with what you wrote even if the end result is unfair and not what you intended. One area that is a particularly serious issue is in beneficiary designations.
Here are three reasons why a DIY estate plan can backfire because of your beneficiary designations.
1. Not Understanding the Rules About Beneficiary Designations. First of all, the biggest reason why DIY estate planning may not stand up in probate court is because the rules on beneficiary designations always govern what happens to your estate. Do you know what those rules are? If you do not, you risk your estate plan not holding up in probate court. To explain, when you open a bank account, a brokerage account, or a retirement plan, you will be asked to designate one or more beneficiaries. Whoever you write down in that beneficiary box is the person or people who will receive the remainder of the account when you pass away. Now, if you decide to write a different name or names in your will or estate plan, it does not matter. This is important! Whatever is written on the beneficiary designation form for any account is what will stand. Unfortunately, with your DIY estate plan, you may not know or understand this and think you have taken care of beneficiaries properly when you really have not.
2. Keeping Beneficiary Designations Updated. As of now, you have gone over and understand the beneficiary designation rules and you know that your estate plan has to match what you put on the forms for your accounts. However, if you are not regularly updating your will and accounts in your DIY your estate plan, your estate plan could be invalid. Every single time you decide you want to change a beneficiary designation you have to do it both on your accounts and in your estate plan. This may be avoided if you discuss your estate planning needs with a qualified estate planning attorney.
3. You Decide to Make Your Estate a Beneficiary. In your DIY estate plan you make your estate the beneficiary of all your accounts. By doing this you could run into unintended tax consequences. We highly recommend that you consult an estate planning attorney for more information.
We know you may have questions about this, and many other, elder care issues. At the Law Office of Brian C. Perlin, P.A., our credentials enable us to provide a multi-disciplinary approach to our legal services. By building relationships with our clients, we are also able to understand each client’s needs and desires, and we support such goals through thoughtful, comprehensive planning techniques. We encourage you to contact us and schedule a meeting.