Filbrandt Reports

How 'Saving Money' Can Actually Waste Money

Volume 18, Issue 8

Executive Summary

In this report, you will learn:

  • Why do-it-yourself estate planning is rarely a good idea
  • How having an inexperienced person handling key estate administration roles can lead to problems
  • Often, people who intend to DIY end up with no estate plan due to procrastination
  • Money you “waste” might be intended for your loved ones
  • The effects of claiming Social Security before or later than age 66

Few activities are more wasteful than doing something wrong. The tremendous cost of saving money to do what you should hire a professional to do is a great example.

In the area of estate planning, do it yourself (DIY) is rarely a good idea. Estate planning deals with 1) your life savings, 2) your loved ones, and 3) an irrevocable decision, since whatever instructions you leave in a valid form must be carried out.

Many people are tempted to turn to a close friend or loved one when it comes time to create and manage an estate plan. Sometimes someone you trust will offer to help. Generous offers like this notwithstanding, this is typically a great time to bring in the professionals. Trying to save money and hoping not to offend friends and family who mean well are two common reasons for not utilizing an estate planning professional. The end result can be mistakes that result in beneficiaries receiving much less than they would have with a professional estate planner doing the work.

Areas where poor choices made in estate planning often lead to litigation: the plan and the person

These are where most of the mistakes are made, and where you do have control.

The Plan – This is one of the simplest areas in estate planning, which if handled incorrectly can lead to terrible results. When a DIYer tries to save money, they often do the plan themselves.

One unfortunate outcome of a do-it-yourself effort is the failure to correctly title one’s assets, according to Filbrandt & Company Financial Adviser Travis Cliff. If you opt for a trust as your estate planning document, all of the assets you want to pass along to your beneficiaries must be titled to the ownership of the trust, Cliff said. Without retitling the assets, the trust is essentially useless.

The Person — Who will you choose as your estate plan drafting attorney, accountant, executor, trustee, attorney-in-fact and guardian? These are all critical roles in the plan. But if you appoint a family member or close friend, the person may be conflicted, have a damaged relationship with the decedent or other family members, or simply have no experience.

Do you really want to have the person handling your entire life savings for the people most precious to you to be doing this for the first, and perhaps only, time in their lives?

Each of us has the ability to create a plan, and serve in key roles in the plan, with some research and education. But can everyone serve with knowledge, experience, independence, and objectivity? In most cases, the answer is no.

These are key issues in understanding how not to “waste money by saving money” using a DIY approach to issues, assets, and people involved in our estate plans. In some cases, the money wasted is the money that was intended to go to loved ones.

Filbrandt Private Trust provides all of the services mentioned above, and is licensed in all 50 states. We welcome your inquiries about how professional trust services can help your specific circumstances. The phone call to 800-431-9740, however, is DIY.

Volume 18, Issue 8

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