Skip to main content
Kentucky Bankruptcy, Business, Probate Lawyers

6 Common Estate Planning Issues

Estate Planning

Most people labor under the assumption that life will follow a “normal” path, stretching from school to retirement with a chapter for marriage and kids. But real life is full of choices and twists of fate. There are no guarantees except death and taxes. Consider what would happen to your loved ones if you died suddenly and unexpectedly. On the other hand, what would happen if you lived to an old age? Making estate planning decisions from your death bed comes with its own set of challenges. Putting a plan in place now and having years to adjust it gives the most peace of mind. The rules of estate planning are complex and can be difficult to understand, so it is best to consult an attorney. Here are some common issues and basic advice.

1. Have contingent beneficiaries on retirement accounts.

When you specify a beneficiary who will inherit your retirement account, choose at least one contingent beneficiary as well. This person inherits only if your primary beneficiary dies before you do. And remember that if you change IRA custodians (banks or brokers), you have to sign new beneficiary designations.

2. Specify in writing who receives special assets.

Whether it’s a coin collection, a piece of jewelry or a work of art, put down in writing to whom you are making the bequest. Known as “separate writing,” these bequests are mentioned in your will, but drawn up outside of it and can be updated any time. However, a better practice is to have your Last Will updated to include these specific bequests.

3. Plan for new relationships.

Parents who intend to leave assets to their children should plan for the possibility that they will be widowed and may remarry. The most common arrangement is for the deceased spouse’s assets to go into a trust that benefits the surviving spouse, but then passes to the children — and not the new wife or husband — when the surviving spouse dies.

4. Plan for aging parents.

Retirees are living longer, and this could present financial difficulties for both them and their children. Not only do children need to plan in advance for their parents’ care as a budget item, they should consider the question of who will support the parent in a nursing home if the adult child pre-deceases the parent. An adult child who provides financial support to an aging parent may be able to claim the parent as a dependent for tax purposes, and this possibility should not be overlooked. Additionally, there are a myriad of social security, Medicare and Medicaid issues which impact an elderly parent’s ability to maintain existing living conditions or, if necessary, gain access to a short-term rehabilitation facility or a long-term nursing home.

5. Select the right person for the job.

Estate PlanningChoose people with good judgment and financial skills to represent you as required by wills, trusts, powers of attorney, health care directives, etc. Think of an executor’s or trustee’s job and imagine you were hiring an employee. Try to keep perspective about the importance of estate planning and not worry about hurting someone’s feelings or being fair. Pick the most responsible one for the job and name a backup.

6. If you have a family business, have a business succession plan.

Few family businesses survive into subsequent generations. Having a properly structured shareholders’ or partnership agreement is an important first step, but questions such as whether the successors you designate want to take over or how they will be compensated in a way that is fair to other family members must be addressed.

For the past 35 years, the Fayette County estate lawyers at Bunch & Brock attorneys have guided many people through the estate planning process efficiently and effectively. To get started, or if you have any questions about this topic, call Bunch & Brock at 859-254-5522. You can also fill out this online form.