Making your estate plan is something that has to be done before it is too late. In your quest to get it completed, you must ensure that you don’t make mistakes that could invalidate the plan.
There are several things that you have to think about as you make your plan. Just make sure that you avoid these common errors.
Including payable on death accounts
Any accounts that have payable on death designations can’t be included in your estate plan. Typically, this includes bank accounts and some other financial accounts. In these cases, the payable on death designation determines how the asset will be distributed.
Even if you don’t have any other trusts as part of your estate plan, you need to put your life insurance policies in a life insurance trust. This helps to protect the beneficiary since it can help him or her avoid claims against the life insurance policy by creditors. You can even use this type of trust to include stipulations in the distribution of the life insurance policy payouts.
Forgetting to update your estate plan
You must ensure that you are going over your estate plan on a regular basis. Typically, you should go over the plan at least once per year. If you have substantial changes to your circumstances, such as getting married, divorced or having a child, you should revisit the plan to ensure that it is still set up how you want it. Make sure you don’t stop with only the estate plan. You also need to check those payable on death designations when you update your estate plan.
Source: FindLaw, “Ten Common Estate Planning Mistakes to Avoid,” accessed May 12, 2017