Mistakes You Could Be Making with Your Estate Plan

It’s easy to avoid making an estate plan but lacking one won’t be easy on your loved ones and could cause tension during your later years and after your passing. Having your affairs in order can be a big help to your family, so consider creating a comprehensive estate plan. Unfortunately, there are many mistakes you can make when it comes to your estate plan. So, watch out for these key blunders!

Avoiding Naming Beneficiaries

Many people don’t realize that they need to name a beneficiary for retirement accounts and life insurance policies. They may never get around to filling out the forms, or they may assume that these will automatically go to their spouse or children. If you do not name a beneficiary for life insurance or retirement accounts, then the financial company you use will have its own rules about where the assets will go after your passing. Even if you named a beneficiary in your will or trust, you need to name the same beneficiary on your retirement account because beneficiary designations can trump will and trust directives.

Misspelling Your Beneficiary’s Name

This may seem way too simple of an error, but it’s more common than you might think. It can be easy to forget to put “Jr.” or “III” after someone’s name. Even forgetting middle names or their order can cause issues. Make sure the name you put down matches that person’s birth certificate exactly or matches their current legal name if that has changed due to marriage, divorce, or any other reason. Not having the names match could result in delays in getting that person their inheritance or even a legal dispute between two people in the family.1

Neglecting Your Old Estate Plan

There are many reasons why you might need to update your estate plan, including changes in estate law, the tax code, and personal changes. For example, if you’ve designated your daughter as the beneficiary of a life insurance policy and she gets married and changes her name, you may need to update your designation. Similarly, divorces, legal name changes, deaths, and births in the family can mean that you need to revisit your estate plan and update names in any important legal documents.

Avoiding an Estate and Legacy Planning Professional

Some people think that having an estate plan is only for billionaires, but this isn’t the case. If you have assets that you want to pass onto your loved ones, you may need to create a will or a trust, as well as name beneficiaries for your assets. There are many tax considerations when creating an estate plan, and a professional can help you in that area too. These rules are always subject to change, so remember to revisit your estate plan every few years with a professional to see how new laws may affect your plan. We can help you create an estate plan that is integrated with your overall retirement plan. Sign up for a time to speak to us about how we can help you get started or help you update your estate plan.