The populous baby boomer generation is in the process of transferring its wealth to the younger generations in California and throughout the nation. This $30 trillion transfer along with continuing increases in the federal lifetime federal estate and gift tax exemption makes this a good time for boomers and others to do some fruitful estate planning. Despite the favorable circumstances, experts report that some people will continue to make certain repetitive and predictable mistakes.
One mistake of omission is to die without a will or a living trust to guide the desired distribution of assets. The price of dying intestate can be expensive. Various complications can arise, such as where the heirs may have to establish their identities at considerable expense to the decedent's estate. The most famous example of how damaging this mistake can be occurred with the entertainer Prince, whose purported heirs may still be litigating some lingering issues because there was no will to guide them.
With no will there is usually also no health care proxy and no power of attorney. Failing to have the power of attorney can turn out to be a significant mistake if the family members are forced to seek a guardian appointment from the court when an unexpected incapacity occurs. Failing to have a health care proxy and a living will can result in the medical providers making some critical health care decisions that may be contrary to what the person may have wanted.
Failure to do estate planning in California can also result in bitter fights between heirs, as in the common situation where there are children from a previous marriage and children or stepchildren from a more recent marriage. The succession will depend on state law and will often be unrelated to what the decedent would have wanted. In addition, complications can arise by not having real estate and investment accounts titled properly to suit the decedent's wishes and needs. Related problems involve beneficiary designations being ignored or not updated to new circumstances. Spending the time and resources to correctly prepare an estate plan through an experienced estate planning attorney will pay valuable dividends far in excess of the investment.
Source: marketwatch.com, "7 common estate planning disasters and how to avoid them", Michael Feinfeld, April 26, 2018