Avoiding estate plan failures

On Behalf of | May 18, 2018 | Estate Planning

Nevada residents should be aware that many estate plans might not bring about the desired results. A plan may contain insufficient language, or poor tax planning may be a factor. However, the majority of estate plan failures tend to be related to human behavior.

Heirs or designated beneficiaries may not have the financial maturity to properly handle the wealth that they receive. They may also not be emotionally equipped to process their new financial standing. While this is very likely to occur in situations in which the estate has a very high monetary value, such factors can be present in estates that are worth much less.

Providing for their children tend to be the focus of most parents. People may not be overly concerned about teaching their children certain values about wealth or how to accumulate and properly manage their money.

Unprepared heirs who receive wealth are likely to squander the money. This may include fraud, bad spending choices, neglect and unwise investments.

In order for an estate plan to be successful, heirs should be taught about the proper management of wealth. It is important that they learn this skill before receiving the money as they are not likely to learn it quickly during the distribution of the estate. If the owner of the estate is unable to teach his or her heirs, that individual may consider asking financial advisors to hold informative meetings, retreats or workshops with his or her heirs.

An estate planning lawyer may advise clients about what they should include in their estate plans. An attorney may consider a client’s assets and goals and recommend certain types of wills or trusts. For example, a charitable remainder trust may be recommended to clients who want to leave a part of their estate to their favorite charities.