Common Mistakes People Make When Medicaid Planning (And How To Avoid Them)

In this article, you can learn about…

• Steps you can take to avoid common pitfalls in Medicaid planning.
• How to structure your estate to maximize the benefits of Medicaid planning.
• Why your family‘s role in Medicaid and estate planning should focus on your

What Are Common Mistakes People Make When Doing Their Own Estate Planning (Even With An Online Do-It-Yourself Tool)?

Some of the most common mistakes include not understanding what their will is supposed to do – and what it can actually control. We see a lot of issues with do-it-yourself tools where people mistakenly believe that their will controls their life insurance or retirement account policies. Additionally, many people sign documents incorrectly, thus failing to meet the necessary requirements for a valid will in the state of Florida.

Are There Assets That Cannot Or Should Not Be Put Into A Will Or A Trust?

During your lifetime, you should not transfer your retirement accounts into your revocable living trust. Retirement accounts need to stay in your individual name.

In terms of assets that cannot or should not be put in a will, it really depends on your individual situation. There are instances where it is appropriate for your life insurance or retirement accounts to pass outside of the probate process through the use of beneficiary designation(s).

Moreover, in a will, you can only control the distribution of assets to beneficiaries that are in your name. If there is someone who has rights of survivorship in a particular asset or bank account, your will cannot control that gift or distribution to your beneficiary because the surviving owner will have full authority and ownership after you pass away.

How Specific Do I Need To Be When Listing Assets In A Will Or Trust? Do I Need To Include Information Such As Bank Account Numbers, Addresses, & Social Security Numbers?

We generally recommend staying clear of vague language that would make it difficult for the court or a personal representative to understand your wishes.

We generally do not recommend including social security numbers in your will or trust. With regards to bank account numbers and addresses, the decision about whether or not to include certain account numbers or addresses is made on a case-by-case basis.

What Happens If Someone With A Will Or Trust Does Not Update Their Documents To Reflect Changes In Their Estate?

As a general rule, we recommend that people keep their will or trust updated so that it continues to reflect their estate planning goals and circumstances.

If a person fails to keep their will or trust updated, and their assets change, the consequences depend on the nature of the assets and on the person’s estate planning goals.

If, for example, someone wanted their assets to be distributed in equal shares to their children, regardless of how much or how little that person has at their passing, their wishes are going to be honored.

What Happens When Someone Dies Or Becomes Incapacitated Without A Will, Trust, Or Other Important Documents in Place?

If someone passes away without a will or a trust, assets are distributed according to the law of the state at the time of their passing.

If someone becomes incapacitated without planning documents such as a power of attorney or healthcare directives in place, it is very likely that a court-supervised guardianship will be required.

Should I Name My Beneficiaries On My Bank And Retirement Accounts? Could This Help Avoid Probate?

It is important to pay attention to who you have listed as beneficiaries on your bank and retirement accounts. Generally, when beneficiaries are listed on bank or retirement accounts, those assets avoid probate. However, you need to pay special attention to the type of beneficiary that is listed on the accounts.

For example, if a minor child is listed as a beneficiary on a bank or retirement account, depending on the value of those accounts, a guardianship case may be required. Also, if the beneficiaries pass away before you do and you have not updated those designations, your bank or retirement account may need to go through the probate court process.

Additionally, if the beneficiary on your bank or retirement account has special needs or is disabled, that may cause some other complications that you may not have been aware of.

Who Should Be Involved In My Estate Planning? Should I Involve My Children Or Other Beneficiaries?

Ideally, you will have the type of relationship with your loved ones that makes it easy to talk about your plans. If this is the case, it would be beneficial to keep them in the loop about your estate planning documents and your loved ones’ roles in case of a medical emergency or if pass away. It is important for people to not be surprised by the roles that you have nominated them for.

In terms of making estate planning decisions, we recommend that you speak with your attorney privately without anyone else present, in order to protect your privacy and attorney-client privilege. The purpose of attorney-client privilege is to protect the client. The client has the right to have communications with their attorney kept confidential. However, the client can choose to waive that right and allow the communication to be shared specifically with certain individuals.

If it feels right and is appropriate to include other family members in your thought process, it can be very helpful to do so – as long as it is understood that these are ultimately your wishes and your decisions to make.

For more information about Estate Planning Law in Florida, a Discovery Call is your next step. Get the information and legal answers you are seeking by calling (813) 686-7175 today.