Retired Estate Planning and Litigation Attorney Jim Hales enlightened the Minden Rotary club this week on estate planning.  Jim has been retired for 18 months, but summed up what he learned in a very quick 30 minutes.

Jim started by covering 1000 years of history in 4 minutes.  Originally the King of England owned everything.  As England transitioned to private ownership Parliament passed laws to allow for transfer of ownership. Parliament first created the Statute of Deeds (which required that transfer of real property be done through written deeds) and then the Statute of Wills (which allowed property to be transferred after death through the use of wills).  The United States generally adopted England’s laws.  Starting in the 1960’s trusts became a popular substitute for wills.

After a discussion about Wills, Probate and Trusts, Jim summarized the four ways in which an estate can be left:

1. Intestate (no will) - estate commonly left to spouse and naturally born kids.
2. Will - which also allows you to designate a guardian of your kids.

3. Trust - which allows for more complex estate planning and can be used to avoid probate.

4. Transfer on Death - which is a more modern tool that allows the designation of a beneficiary on certain assets such as bank accounts and real property.

And after 30 years of legal experience in the area, Jim identified nine ways he has seen estate plans go wrong.

1. Don’t tell anyone about your plan (for example, leaving one child out of the will and not telling the child until they find out after your death);
2. Fail to care for a special needs beneficiary;
3. Fail to address the impact of divorce or a second marriage;
4. Fail to address providing for a spouse married later in life;
5. Fail to address how property will be distributed when both spouses have children from previous marriages;
6. Fail to fund your trust and keep it funded;
7. Fail to pick the right person to be the Personal Representative / Trustee;
8. Fail to name the right guardian for your minor children;
9. Assume you don’t need an estate plan until retirement age (your adult children should at least be thinking about who would be the guardian of their children).