Texas estate planning attorney Norma Montalvo Petrosewicz wrote an excellent article called “Top 10 Estate Planning Mistakes.”  The article (its in Word 2003 format) starts with

Many attorneys are asked to draft a simple Will, and most attorneys will do so because all it takes is filling out a “form”, right?  This article is presented to give non-estate planning attorneys the traps to be wary of in preparing an estate plan.

Although the article is aimed at attorneys who do not prepare estate plans regularly, the article is also a good primer for everyone who needs a will, trust and estate plan.  Here's Norma's list, but read her article to understand why each item on the list is a mistake:

1. Failure to Plan for Disability
2. Failure to Review Beneficiary Designations and Titling of Assets
3. Failure to Consider the Estate and Gift Tax Consequences of Life Insurance
4. Failure to Take Advantage of the Estate Tax Exemption
5. Leaving assets outright to a surviving spouse
6. Leaving Assets to Children at a Young Age
7. Leaving assets outright to Adult Children
8. Incorrect Beneficiary Designations for IRA’s
9. Planning an Estate Distribution Around Specific Assets
10. Gifting Asset to Avoid Probate

For more information about estate planning for Arizona residents, see our Estate Planning Law Library.

The Probate Lawyer Blog:  “It's been widely reported across various websites in the last couple days that Farrah Fawcett's will has been revealed and it “shockingly” disinherited her longtime ex-boyfriend Ryan O'Neal (father to her son, Redmond). These reports are wrong on several levels.  Fawcett family.  First, the document was her Trust, not her will. . . . The specifics of how this will work are a good lesson for others to follow when they have a beneficiary who is not ready to receive a chunk of change all at once.”

Financial Times:  “Wealthy families are spending more time educating their children in financial matters after an explosion of wealth among entrepreneurs means there is more money to be passed to the next generation.   The past decade has seen an enormous amount of wealth created around the world.  While some of it has been lost recently there is still enough left for it to be an issue among the newly rich, who have little idea how to prepare their families to receive it.”

North Carolina Estate Planning Blog:  “Planning for tax-qualified plans, which includes IRAs, 401(k)s and qualified retirement plans, requires a careful examination of the potential taxes that impact these assets. Unlike most other assets that receive a ‘basis step up' to current fair market value upon the owner’s death, IRAs, 401(k)s and other qualified retirement plans do not step-up to the date-of-death value. Therefore, beneficiaries who receive these assets do so subject to income tax. If your estate is subject to estate tax, the value of these assets may be further reduced by the estate tax. And if you name grandchildren or younger generations as beneficiaries, these assets may additionally be reduced by the generation-skipping transfer tax. All tolled, these assets may be reduced by 70% or more.  There are several strategies available to help reduce the impact of these taxes:”

Farrah Fawcett's 2007 Trust provides that her estate is to be disposed of as follows:

• $4,500,000 in trust for life to her son Redmond O'Neal.  At his death, any remaining funds go to the Farrah Fawcett Foundation
• $100,000 to Gregory Lott
• $500,000 to her nephew Gregory Walls
• $500,000 to her father James Fawcett
• the balance to the Farrah Fawcett Foundation

The Trust does not give anything to her long-time significant other Ryan O'Neal, who said “These were Farrah's wishes and I am perfectly happy with them.”

Reuters:  “Jeffry Picower, the billionaire beneficiary of Bernard Madoff's fraud scheme who died last month in Florida, left $200 million to his wife and appointed her chairwoman of a charitable foundation to be funded with assets from his estate.  The $200 million for Picower's wife, Barbara . . . . The Picowers were friends of Wall Street financier Madoff, who is serving a 150-year sentence after pleading guilty to running a $65 billion Ponzi scheme.  The trustee handling the Madoff fraud case, Irving Picard, said in court documents filed in U.S. Bankruptcy Court in New York in September, that Picower, newly listed as one of the 400 wealthiest Americans by Forbes magazine, was complicit in the fraud.”

Pittsburgh Post Gazette:  “After an American soldier died in Iraq five years ago, his father wanted to save copies of his son's e-mails sent through a Yahoo! account.  But the Internet company's privacy policy allowed access by only the soldier, triggering a legal fight.   The case highlights a growing discussion concerning what happens when the owner of password-protected online accounts dies.  To whom do they belong ? And how can digital assets be passed on to heirs?”

news.com.au:  “In a digital world your deepest secrets no longer die with you.  Andrew Ramadge reports on what happens to your private emails when you pass away.”

Los Angeles Times:  “Michael Jackson’s funeral at Forest Lawn cemetery in Glendale cost more than $1 million, including $35,000 for the pop star’s burial garments, according to court documents unsealed” November 10, 2009.

South Florida Estate Planning Law:  “I have long admired the Wall Street Journal and considered them a paragon of straightforward and relatively high level journalism.  . . . Not anymore.  Today, the Wall Street Journal has led their readers horribly astray in such a manner that may cause untold pain and suffering (along with substantial costs) to God knows how many people.  I'm talking about their ‘review' of do-it-yourself estate planning.  Apparently, there is a recurring column in the WSJ entitled ‘Cranky Consumer.'  It should be titled ‘Idiot Consumer.'”

See also “Self-Help Legal Switcheroo” for another opinion on Legalzoom and its disclaimers of responsibility for your boo boos with CYA language such as “Legalzoom cannot provide legal advice and can only provide self-help services at your specific direction.”

North Carolina Estate Planning Blog:  “One common oversight I see when reviewing new clients’ financial status is failure to consider the estate tax impact of large life insurance policies. Most people know that life insurance proceeds are received free from income tax.  What most don’t know, however, is that the proceeds are part of the insured’s estate for estate tax purposes if:

• The proceeds are payable to the insured estate, or
• The insured has any “incidents of ownership” of the policy, such as the right to change the beneficiary or access the cash value.”

Times Online:  “Peter Sellers had reached a final divorce settlement with his fourth wife that would have deprived her of any claim on his estate — but he died before the document became binding, according to legal papers that have come to light. . . . [The wife] died an alcoholic in 1994 and the fortune left by the star of the Goons and Pink Panther films has since been inherited by her daughter by her next-but-one husband after Sellers.  Cassie Ungar, 25, who lives in Los Angeles, never met her benefactor.”

Wall St. Journal:  “It's hard to overstate the crisis facing charitable giving today.  So let me just say it as plainly as I can: Much of current philanthropic giving, by foundations and individuals, neither meets the needs of our charitable organizations nor addresses some of our most urgent public needs.  Foundation practices today are too bureaucratic, inflexible and cautious, and too focused on short-term objectives.  Too often, the process and procedures of grant making are more tailored to the needs of foundations and their trustees than to the requirements of nonprofits.”