While the worst mistake a person can make is having no estate plan in place at all, many other mistakes will prevent your estate from being administered correctly, or they can even harm your loved ones or cause contention in your family. Along with professional legal guidance, the following tips can help you create a solid plan that your family can live with.
According to U.S. News & World Report, many people neglect to update their beneficiary designations on their financial accounts and retirement plans. Even if there is language in your will that states who you would like these proceeds to go to, if the beneficiary designations don’t match your final wishes may not be granted. Make sure you update all documents when making changes to your will or trust. Also, it’s a good idea to review your estate plan every few years to make sure it still reflects your wishes.
Another common issue is how assets are dispersed to children. A significant influx of money to a child or young adult lacking financial wisdom is likely to be squandered. Conversely, parents can set up inheritances so they are dispersed on a set schedule, which prevents a person from receiving a lump sum of cash on a parent’s passing. Not only does this preserve your child’s financial future, it prevents them from developing a laid-back attitude about money and finances.
Forbes also warns against not properly funding your trust. This entails changing the titles of property and other assets to show trust ownership. For instance, your real estate deed must display the name of your trust in order for it to be included. You also need to include the item within the trust agreement itself or listed on the schedule of assets filed with the trust. If you have questions about your responsibilities, be sure to ask your legal counsel for an explanation.