Arguably one of the biggest reasons why online estate planning documents can devastate your family’s estate plan and leave them in financial ruin is because you don’t get legal advice with do-it-yourself documents. What most people don’t realize is that the value of an estate plan isn’t just in the documents—it’s in the advice and counsel you get from your estate planning lawyer. An estate planning lawyer can identify issues that are unique to your financial and personal life that will affect your estate plan. Some of those issues might include blended families, predeceased beneficiaries, family drug/alcohol problems, problems with the in-laws, careless spending, worthless investments and Medicaid planning opportunities. My last blog, Part I of Reason 1 (http://www.cincymagazine.com/Main/Articles/4620.aspx), addressed the concerns you might have if the wrong heirs inherited your estate. This blog will address how your beneficiaries’ wasteful spending and worthless investments can ruin your family.

 

Part II. Wasteful spending and worthless investments can ruin your family—money can be a curse! 

Are you worried about your family’s long-term financial well-being after you die? Are you worried that your spouse and/or children are not fiscally responsible enough to manage a large sum of money when you die? If not, you should be. According to USA Today, about 70 percent of all lottery winners go broke, many within a few months of winning. Much like lottery winners, heirs who receive an inheritance outright, big or small, are at risk of quickly going broke, mostly because of reckless spending and worthless investments. Without a lawyer’s guidance, you might not be aware of the risks involved with leaving assets and money outright to your spouse and/or children. Such risks can include your spouse being preyed upon in his/her twilight years, a child or grandchild using their inheritance to feed a drug addiction, your child dropping out of college to travel the world, or your fiscally irresponsible spouse or child mismanaging their investments.

To prevent your loved ones from recklessly spending their inheritance and investing in worthless investments, estate planning lawyers typically suggest that you utilize a simple revocable trust in your estate plan. A revocable trust provides a lot of flexibility that provides liberally for you and your spouse while you are living. It can also control what distributions are made after your death, whom those distributions are made to, and when those distributions can be made. If your trust is set up properly with a responsible trustee and successor trustees, you can also control who makes investment decisions for the trust assets.

Online document providers provide very basic trusts for their customers. However, online trusts typically do not include specific provisions that address your family’s unique situation. Something that may seem like boilerplate to you in your online trust agreement might actually be an important provision that operates contrary to how you want your entire estate plan to work. An estate planning attorney, on the other hand, is able to assess your family’s situation and suggest a strategy that will give you peace of mind.

In estate planning, one size does not fit all. Over the years, I have found that no two families are alike. Each family has unique issues and online documents typically cannot address those issues. If your issues are overlooked or ignored, your estate plan will probably not work the way you intended. If you have concerns about your family’s well-being after you become disabled or die, an estate planning attorney can help you identify your family’s relevant issues and mold your estate plan to fit your specific needs.

 

Bill Hesch is an attorney, CPA and PFS (Personal Financial Specialist) who is licensed in Ohio and Kentucky and helps clients get peace of mind with their tax, financial and estate planning. He focuses his practice in the areas of elder law, corporate law, Medicaid planning, tax law, estate planning and probate in the Greater Cincinnati and Northern Kentucky areas. His practice area includes Hamilton, Butler, Warren and Clermont counties in Ohio, and Campbell, Kenton and Boone counties in Kentucky.

(Legal Disclaimer: Bill Hesch submits this blog to provide general information about the firm and its services. Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel. While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog. Bill Hesch does not enter into an attorney-client relationship with any online reader via online contact.)