Often people ask me, “What is the biggest mistake you see farm families make in their estate plans?” Quite a few specific examples pop into my head. Let me list a few.

Deeding property to your children and reserving a life estate is usually a mistake and cannot effectively be corrected. People often think this will achieve things that it will not, and it immediately (not just after you die) exposes that real estate to creditors, divorces and other bad things that can happen to your children.

A married couple with an estate of any size at all should never own their property as joint tenants with right of survivorship. But a real exercise in futility is when they own real estate as tenants in common but sign wills that leave everything to each other.

Transferring assets to inflexible trusts is another mistake. Sometimes this occurs during life (a person creates an irrevocable trust and transfers money or property to it), but it also occurs at death (under a will or living trust, the deceased person directs their property into trusts for beneficiaries). A married couple normally should plan to leave most of their assets in a trust at the first death for the benefit of the survivor, but the terms of that trust should be flexible. How will the income be handled? How will it be taxed? Who will receive the assets after the survivor dies, and can the survivor, while living, change that? Irrevocable trusts get a bad rap, but that is because they are often drafted without appropriate flexibility, effectively tying everyone’s hands. Trusts — whether taking effect before or after the maker’s death — are a wonderful planning tool, so long as they are written to be flexible.

Happily ever after?
It is usually a mistake to give property to multiple people as joint owners, expecting them to live happily ever after. When property is owned by two or more individuals, the one who is most eager to get along is the one who suffers. The ones who want to “cash in” win. Do your utmost to split the property among your heirs rather than trying to force them to be “partners” in land ownership. However, if you really want multiple people to share the use, income or other benefits of some real estate, it is essential to put the property in trust and spell out how you want benefits shared. Never ever assume that people will get along without specific instructions.

These are just a few of the most glaring mistakes people make. But they generally share a common thread. Usually someone leaped before they carefully looked. The biggest and most common mistake made in estate planning is to “do something” before you have fully explored the pros and cons of your action and carefully considered your alternatives.

Fear of the unknown
There are a number of common fears people have, sometimes well-founded but sometimes not. They fear the “cost of probate,” so they “do something” to “avoid probate.” They worry that “the nursing home will take everything,” so they “do something” about that. Maybe one of your biggest fears is incurring attorneys’ fees. If you ask too many questions, you will run up a lot of hourly fees, and maybe for no good reason. So you read, ask around, see what other people are doing, and prescribe your own medicine: a “simple will” or “just a quitclaim deed” or “a basic land trust” or whatever other quick fix you might learn about. Many attorneys will write it up and let you sign it, with virtually no counsel or advice. Sadly, often the thing you do about one fear creates other — sometimes worse — problems that you weren’t aware of.

There are law firms that provide educational workshops to teach you about the wide array of planning issues and opportunities, followed by a complimentary consultation to individually explore the pros and cons of various planning options for you. Attorneys like that consider it necessary to get to know you and your goals before they charge any fee. Then they quote one overall fee, with an ample amount of counseling time built into the process, to develop and implement a plan to accomplish your objectives.

Make sure you work with professionals who will help you accomplish all of your goals as thoroughly as possible, rather than just focusing on the most pressing concern you happen to feel at the moment. Your family will get a much better result.

Ferguson owns The Estate Planning Center in Salem, Ill. Learn more at thefarmersestateplanningattorneys.com.