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Six Common Estate Planning Mistakes

… and how to detect & avoid

them successfully

James E. OstensonAttorney and Counselor At Law

Five Concourse Parkway, Suite 3000Sandy Springs, Georgia 30328

(770) 392-3310

jim@ostensonlaw.comwww.ostensonlaw.com

Estate Planning and Administration

I Timothy 5:8 (NIV)

• If anyone does not provide for his

relatives, and especially for his immediate

family, he has denied the faith and is

worse than an unbeliever.

Three Basic Keys to Estate Planning

• Recognizing that God owns it all and that we are to be faithful stewards of what he has entrusted to us

• Maintaining control during incapacity

• Quick & cost effective wealth transfer at death

Mistake #1

Failing to Maintain Control of Health Care Decisions

Modern Medicine: The Problem

Today 85% of all deaths occur in hospitals and nursing homes (i.e., long term care)

Modern Medicine: The Problem

Result: Longer periods where you “lack decision making capacity”

• Who will make decisions?

• Will there be family conflict?

• What types of care are desired (or not desired)?

Solution: Georgia Advance Directive for Health Care (after 7/1/2007)

• Unambiguous Chain of Command

• Detailed Enumeration of Powers Conferred

• Specific Instructions

• Understandable Statements of Intent

• Organ Donation

• Burial/Cremation Directives

• System to Assure Accessibility 24x7

• www.legaldirectives.com and

www.docubank.com

Mistake #2

Access to Medical Records – Failing to Plan for HIPAA

HIPAA – Locks Down Information

• Medical personnel face stiff penalties

• Reluctant to permit access to vital information

• Solution: HIPAA Authorizations

– In Advance Directive for Health Care –Decision Makers

– Standalone HIPPA Authorizations – Others

Mistake #3

No Plan to Control Financial & Property Matters During Incapacity

Conservatorship During Lifetime

Without appropriate legal instruments to manage

your assets during incapacity, a court

supervised conservatorship is likely

inescapable

Conservatorships = Potential Problems

• “Time-Consuming”

• “Expensive”

• “Cumbersome”

• “Creates Delays”

• “Emotionally Trying”

• “Public Record”

• “Cases of abuse go unnoticed”

Avoid Conservatorships with Living Trusts

Establishing a Trust

An individual can appoint a trustee to manage his or her financial affairs and thus can avoid the need for an appointment of a conservator

Avoid Conservatorships with Durable Powers of Attorney

Durable Power of Attorney

An individual can delegate to an agent the power to make financial transactions on his/her behalf if he is unable to do so himself/herself.

Caution – Powers of Attorney

“A power of attorney that is not well-thought out can not only be ineffective but may even be counter-productive in achieving the principal's overall objectives”

Estate Planning Journal – March 2005

Just a few important provisions …(and there are many, many more to consider)

• Providing adequate instructions

• Management provisions for retirement accounts

• Provisions for collecting governmental benefits

• Continuation of gifting programs

• Care for pets

• Power to fund trusts

• Power to make advanced funeral arrangements

• Powers regarding US Mail

Solution: “The Incapacity Duo”

Consider creating:

• Comprehensive General Durable Power of Attorney

• Revocable Living Trust to hold legal title to assets during lifetime

Mistake #4

Failure to Have a Valid Will or Living Trust

Mistake #5

Failing to Plan for Tangible Personal

Property

Family Fall-Outs: Tangible Personal Property

• Problem: No established plan for the distribution of tangible personal property

• Solution: “Personal property memorandum.” -- Clearly articulated directions, and lifetime family communications

Mistake #6

Failing to Plan for Gift Tax and Estate

Tax

Current Gift/Estate Tax Exemption

In 2016 we each have anexemption of $5.45 millionto cover large lifetimegifts and bequests at thetime of death.

The unused tax exemptionof the first spouse to die is “portable” and can be transferred to the surviving spouse and added to the surviving spouse’s exemption at the time of the second death (unless the surviving spouse remarries).

Where Do You Go From Here?

Additional Resources:

• Emergency card with access to Advance Directive

for Health Care, health care agent contact

information , primary care physician, allergies and

medical conditions

www.legaldirectives.com or

www.docubank.com

• Practical advice for settling an estate peacefully and

fairly

www.thesettlementgame.com

Thank You!

Matthew 25:21 (NIV)

His master replied, “Well

done, good and faithful

servant! You have been

faithful with a few things;

I will put you in charge

of many things. Come

and share your master's

happiness!”