An estate plan protects your property and assets after you are gone, but it also reduces the stress placed on your family when it comes to matters involving your estate. While having an estate plan in place is crucial, it is equally important that your plan is accurate and free of errors. Here are a few common issues that may impact estate plans and what you can do to avoid them.
Not naming successors
When creating a will, you must also name an executor, which is a person responsible for carrying out duties associated with the will. Trustees serve a similar purpose, and choosing the right person is crucial to ensure your estate is protected. However, there could come a time when the person you choose is unable or unwilling to occupy the role. Naming a successor executor or trustee ensures essential duties will be taken care of by a responsible person.
Not reviewing beneficiary designations
Leaving the proceeds of a life insurance policy or retirement account requires filling out beneficiary designations. These designations override information contained in your will, so if there are conflicts the court will side with whoever is named on the original documents. If you fail to update designations after a major life event, such as a divorce, it could cause massive amounts of strife for your family.
Forgetting to fund a trust
Trusts are a great estate planning tool. Not only do they help you structure inheritances according to your wishes, they also protect your property and assets from probate. After creating your trust, your assets must be changed over to reflect ownership by the trust, which is known as funding it. If you fail to fund your trust properly, these assets will not be included and will be subject to probate.