Don’t Make These Estate Plan Mistakes

A few weeks ago, our finance column shared a list of primary reasons why a person or couple should get their estate planning in order.  This time around, let’s revisit some of the common mistakes that are easy to make in estate planning.  (Of course the biggest error is to not enlist the services of a qualified estate planning professional to help with the process.)

Beneficiary Blues — This can take on a few forms. It can be easy to overlook things like insurance policies and IRAs that call for beneficiaries.  If you forget to designate one, or if your designee is deceased, or an ex-spouse, the account will not have the long-range benefit you intended. If one of your beneficiaries predeceases you, alternate provisions should be made to redistribute those benefits, either to the remaining primary survivors, or to the survivors of the deceased person.

Evolving Assets — Sometimes individuals make big additions to their estate after their plan has been created.  This leads to problems outlined previously. And sometimes folks designate benefits for specific investments that they no longer own at the time of settlement.  In some cases this type of decision might require the estate to actually repurchase the item or stock, in order to provide it to the beneficiary, since this was required in the document.

Changing Times — In addition to deaths and divorces, it’s not uncommon for couples to make assumptions about other parts of their future lives together that don’t pan out as planned.  If one partner experiences severe health issues, this could affect the amount and nature of remaining assets. If a partner works longer, makes considerably more money than his or her spouse, or has some holdings that that are not part of their collective estate, it’s possible that the joint estate to become unbalanced. In this scenario it’s likely that more money will wind up going to taxes, than if an attempt was made to shift assets to the “poorer” spouse, while both parties are still living.

Again, the best advice is to seek out qualified advice. Credentialed estate planners and estate attorneys can provide recommendations to meet your specific circumstances.