Unfortunately, there is an increasing trend of DIY-ers when it comes to estate planning. The “do it yourself-ers” are those who choose to create their estate plans themselves. This planning could take the form of a “simple” last will and testament or a “generic” power of attorney. Unfortunately, when it comes to the estate planning you need to protect yourself and your loved ones in the event of incapacity, there are only a handful of challenges that are actually simple and even fewer that can be addressed with generic solutions.

Estate planning answers the tough questions. It is through your estate planning that you can work with your estate planning attorney to create the documents you need that will support you in life and death. What many of us do not realize is that estate planning for your life is just as important, if not more so, than planning for death. This simple reason why is that without lifetime estate planning documents in place, such as health care advance directives, durable powers of attorney, and trust agreements, your person and your property is at risk of court-imposed guardianship should you become incapacitated. Further, in the event that “simple” or “generic” documents do not contemplate the challenging circumstances you are facing then you may still be forced into the costly, potentially combative, and time-consuming guardianship process.

Today, over sixty percent of all Americans do not have an estate plan. The failure to create an estate plan does not exempt you from having an estate plan. In converse, you are governed by the intestacy laws of New York instead of what you may actually want. For example, you may not want to leave money to a specific child or keep the legacy you are creating, neither of which can be done through a DIY estate plan.

You need the guidance of an attorney. Unfortunately, DIY estate planning extends to payable on death accounts. Many of the new clients we speak with share that they are not sure they need estate planning because they have payable on death accounts. When it comes to these types of accounts we caution you. Payable on death accounts are not a substitute for comprehensive estate planning. In fact, although they sound like “simple” and “cheap” alternatives, we often see payable on death accounts cause more harm than good for our clients due to changes that occur in families over time.

Let us share the top eight avoidable mistakes we have seen firsthand in working with our clients and their family members.

1. You accidentally name the wrong beneficiary on this account and, while you wanted to disinherit him or her, the person inherits from you anyway.

2. Your heirs end up needing to file gift taxes because you inadvertently left all of your money to one child who agrees to share it with the other children, and now must pay gift taxes.

3. Your heirs wind up with nothing because you inadvertently left all of your money to one child who refuses to share it with the other children.

4. Your children end up fighting because only one child inherited through a payable on death account and there was no clear direction or instructions for them to follow.

5. One of your beneficiaries is or becomes disabled and through this payable on death account suddenly has too many assets and loses government benefits.

6. Your beneficiary dies before you and now cannot inherit, thus subjecting this account to the probate process.

7. Your beneficiary is a minor who cannot inherit from you, thus subjecting this account to the guardianship and the probate process.

8.The bank is sold to a new corporation and there is no transfer of your designation or proof of your intent, thus subjecting this account to the guardianship and the probate process.

This is just the beginning of all the avoidable mistakes that can happen when you create a payable on death account and use it without the advice of an estate planning attorney. We do not want you to make this mistake! Do not wait to contact our office to schedule a meeting with attorney Patrick Roth to begin planning.