Estate planning is a natural part of aging, and it helps protect your loved ones after you pass away. Although estate planning can be overwhelming, it is important to prioritize to ensure your beneficiaries are always covered. Unfortunately, estate planning mistakes are common, often leading to family disputes and challenges. To avoid conflict, legal battles, and a lengthy probate period, here are several of the most common estate planning mistakes to know of in South Dakota.
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Common Estate Planning Mistakes
These estate planning mistakes can be costly for family members. Although you can’t always guarantee there won’t be disputes over a will, you can still take steps to prevent conflict from arising.
Failing to Create a Will or Trust
The biggest mistake many adults make is failing to create a will or trust. This results in their assets being sent to probate and then following the South Dakota laws of inheritance. According to South Dakota Codified Law 29A-2, the surviving spouse of a decedent will inherit everything. If you do not have a spouse but have children, then children will receive your estate in equal shares. If you do not have children or a spouse, then your assets will be given to your parents or next closest living relatives.
While some people feel they only need a will or trust in their elder years, the truth is that any adult who has assets and people they want to protect should have one. Wills and trusts also offer important directives and financial security for loved ones.
For example, if you have debt at the time of your death, creditors will take their dues from your estate. However, if you have a living trust, they cannot take this money. It will be paid directly to your beneficiaries without going through probate. This is why many individuals choose to have both a will and trust to protect their beneficiaries
Vague or Ambiguous Language
You may make statements in your will that seem clear at the time, but they ultimately leave room for others to dispute your intentions. It is important to be as detailed as possible when writing your will to avoid any potential contests to your state. A lawyer can help you clarify your will and ensure that the terminology you use is appropriate and respects all of the legal formalities in South Dakota.
Overlooking the Need for a Power of Attorney (POA) & Healthcare Directives
Many people mistakenly assume that a will is solely in place to distribute your assets after you die. In reality, it can also offer important healthcare directives if you are severely ill or become incapacitated.
Establishing clear health care directives can also help avoid family disputes during difficult periods. For example, if you ever needed life support or hospice care and could not make decisions for yourself, your will, power of attorney and healthcare directives can ensure your wishes are followed.
Not Adhering to South Dakota Estate Laws
You have to ensure that your will follows all the necessary legal processes to make sure it is valid in the eyes of South Dakota law. In particular, South Dakota Statutes Title 29A outline all of the details and requirements for wills, including laws regarding succession, probate, and duties of your personal representative (will executor).
The best way to ensure that your will is legally sound is to work with an attorney who can provide advice. They can review your current will and let you know whether there are any additional clauses you should add to further protect your estate. They can also help you identify common errors that could cause your will to be contested and possibly overruled during probate.
Our lawyers are skilled at resolving estate matters and family disputes to minimize stress, suffering, and trauma. Schedule a free consultation with an attorney at Alvine Law Institute if you need assistance.
Common Errors in Wills and Trusts
In addition to the mistakes listed above, there are also common errors you should know about when planning a will or trust in South Dakota.
Not Updating Beneficiaries and Asset Lists
You should regularly update your list of beneficiaries whenever there are changes. For example, if you have a grandchild, or if you wish to disinherit one of your heirs, it is crucial that you update your will as soon as possible. You should also ensure that your will or trust fully reflects the current state of your assets. If you acquire new assets, then you want to ensure your will or trust distributes these according to your wishes.
If there are any assets left out of a will at the time of your death, then family members could enter legal battles to determine who has the right to them. Although South Dakota has inheritance laws, many people will contest these and argue that they have a legal entitlement to certain assets. This can.lead to ongoing legal battles that last for months or even years.
Leaving Everything Through a Will
A will is an excellent estate planning document, but it is not your only option when leaving assets to your beneficiaries. In fact, having a living trust may be the better option if you want to ensure that money is given directly to beneficiaries without going through probate.
Choosing the Wrong Type of Trust
Living trusts, also known as revocable trusts, are able to be modified after they have been created. Non-living trusts are permanent, and the third-party you elect to oversee it has full control over the trust after it is made.
Changing or dissolving a non-living trust is difficult, and it can lead to extensive challenges even if you are still alive and want to modify it. In most cases, a living trust is the ideal type as it gives you greater control over your assets and allows you to easily modify your estate plan.
Family Dynamics and Estate Planning
Family disputes can arise when relatives feel they have been unfairly excluded or are unhappy with their inheritance. Preventing family disputes over a will or trust can be done in several ways:
- Clarifying what certain beneficiaries will inherit when you pass, and letting anyone who may contest that be aware of the case. This can also be further documented in a notarized statement.
- Using a neutral third party as an executor and mediator, such as an estate planning attorney.
- Give people tax-exempt gifts while you are alive.
- Advise loved ones on how to handle conflicts if they arise over your estate.
Conclusion
There are many instances where someone’s will not reflect things they told you while they were alive. If you.are currently involved in a family dispute over a will or trust, Alvine Law Firm is here to help.
We are also available to provide legal advice to anyone who is currently planning their estate and would like professional guidance. Please reach out to us at 605-275-0808 to schedule a free consultation within a state lawyer in Sioux Falls, SD today.