(858) 432-3923 tara@cheeverlaw.com
An additional Two More Estate Planning Mistakes to Avoid

An additional Two More Estate Planning Mistakes to Avoid

In the last two posts, we discussed why having a complete, up-to-date estate plan is so important by addressing four common estate planning mistakes – not having a plan, not naming guardians for minor children, relying on joint ownership and not having a plan for incapacity.  If you haven’t read the previous post, click here.

Here, we discuss two more common mistakes:

Not having a coordinated estate plan. It can be difficult to coordinate multiple beneficiary designations and titles so that your beneficiaries inherit the way you want. For example, while the benefit payable from a life insurance policy generally remains the same, real estate and investment values can fluctuate greatly. This makes it quite possible that one beneficiary will receive more and another will receive less than you intended. Keeping beneficiary designations and titles balanced while you are living is a challenge and nearly impossible if you should become ill or incapacitated. Also, if a beneficiary dies, you may want to control who ultimately receives that share of your estate instead of it letting the beneficiary choose who will receive it.

One easy way to coordinate all assets into one coordinated plan is to make a trust the owner and beneficiary of as many assets as possible, then put the distribution instructions in the trust document. This ensures that each beneficiary will receive the correct proportionate amount of the estate, regardless of the value of an individual asset. To add a beneficiary or change a beneficiary’s inheritance, only the instructions in the trust document need to be updated; this is a much simpler process than having to change multiple titles and beneficiary designations. The trust can also include your instructions for what happens to a beneficiary’s share upon his/her death, preventing the inheritance from falling into the hands of someone you might not approve of. An experienced estate planning attorney, such as myself, can assist you in coordinating your estate plan once a complete and customized plan is put in place.

Not funding a trust. A trust can only control the assets that are placed into it. The document may be written well and have excellent instructions, but until it is funded (by changing titles and beneficiary designations), it doesn’t control anything. By having a properly drafted Revocable Living Trust, the assets that are placed into it will avoid probate and government intervention. Please call Cheever Law, APC today to get started on your estate planning.