Five Estate Blunders

     When you hear the words estate planning, what mental images do you see? Do you see beautiful, tanned people with incredible wealth, living in enormous mansions, riding in shiny limousines and boarding private jets bound for exotic destinations? If so, then you are only partially correct. In reality, everyone has an estate worth planning. Some estates just are more complex than others. In this article we will review five basic estate blunders common to princes and to paupers alike.

#1 Incapacity Issues

     On your 18th birthday you are considered an adult American citizen and you become responsible for your own personal, health care and financial decisions. Even your parents become strangers to you, in a legal sense, should you become incapacitated. This same legal strangerhood applies, by the way, between spouses.
     As a result, every adult American, married or single, should appoint agents through proper Durable Powers Of Attorney to make their personal, health care and financial decisions in the event of their incapacity. Alternatively, a court process involving at least three lawyers may be required to appoint agents for you, with ongoing court supervision. This can be both invasive and expensive.

#2 Minor Children Matters

     Silver and gold aside, if you are blessed with children, then they are your most valuable assets … even if you feel like trading them for S & H Green Stamps at times. If your minor children were orphaned, who would rear them to adulthood and impart your morals and values to them? Only through a Last Will & Testament can you appoint the appropriate guardians (i.e., back-up parents) for your minor children. Alternatively, a court process would be required to appoint them. This process is not only expensive and public, but the court may not appoint the same parties you would have selected.

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Family Feuds

     The bloody feud between the Hatfields and the McCoys ended well over a century ago, spanned two decades and resulted in a dozen deaths in and around the Appalachian area of eastern Kentucky. This famous inter-family feud had all of the elements of a Hollywood drama.
     While the Hatfields and the McCoys may have settled their differences long ago, intra-family feuds are rather common these days following the death of a family member. That fact was confirmed in a survey conducted by the AARP/Scudder Investment Program of Americans age 50 and over. According to the survey, 20 percent of the respondents cited problems among surviving family members due to their inheritance, or lack thereof. Oftentimes these feuds are over tangible personal property and family business interests.

Tangible Personal Property

     The survey made an interesting discovery: cash is the most prized asset over which family members fight, but tangible personal property (e.g., heirlooms like antiques and jewelry) came in a close second. In fact, respondents reported that such property accounts for 47 percent of the feuds, followed by personal residences at 43 percent, other real estate at 31 percent and other investments at 11 percent. Fortunately, the laws of most states provide a flexible solution for the specific distribution of tangible personal property.

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