When estate planning, there are several issues that you should be aware of to ensure your estate’s personal representative distributes your assets according to your wishes and that you continuously protect your loved ones’ financial future.
Here are some common issues to watch out for:
Failure to consider asset ownership type
The way your assets are titled can impact their transfer upon your death. Joint tenancy, tenancy in common and beneficiaries on accounts can all affect your estate’s distribution. Failing to consider your assets’ ownership types could result in a prolonged and costly estate administration.
Outdated documents
A part of establishing your estate plan includes regularly reviewing and updating its inclusions and terms, especially after major life changes, such as a marriage, divorce, the birth of a child or the death of a beneficiary. Otherwise, you risk a distribution that does not align with your wishes.
Uniformed beneficiaries
Not keeping beneficiary designations up to date on documents, such as insurance policies and retirement accounts can lead to the wrong people getting a hold of your assets.
Improper setup of estate plan tools
When setting up your estate plan, you should ensure that the tools you use align with your needs and priorities and that you are using them correctly.
For instance, you can use trusts to manage assets and provide for your beneficiaries with specific instructions, tax advantages and protection from creditors, but you need to set them up correctly for them to be effective.
DIY estate planning
Using generic, one-size-fits-all documents can lead to errors and omissions that could invalidate your estate plan or cause confusion and disputes. Instead, seeking guidance from a qualified estate planning attorney can help you address your needs and develop a plan that fits your specific situations and goals.
Failing to consider these potential issues can lead to a variety of unintended consequences, such as probate complications, tax implications and so much more. You should take advantage of estate planning to prevent any of these consequences and maximize its benefits for you and your loved ones.
