Five Pitfalls Overlooked in Estate Planning

There are many different steps in theestate planning process, but too often these five areas in the estate planningarena are overlooked. Clients will be thankful if advisors take the time toaddress these five estate planning pitfalls. 

• Make sure legal documents are accessible 
• Requestbeneficiary designation forms
• Have yourclient evaluate the beneficiaries circumstances 
• Clients owninga business should formulate a succession plan
• Clients need totake the time to review and update their estate plan  

First, an attorney can be delayed in fulfillinga client’s wishes because he lacks access to important legal documents. Therefore, a client might want to keep important documents in places that are accessible to thosewho need them to prevent this delay. Not keeping documents accessible can cost heirs both time andmoney. Second, attorneys might want to evaluate assets outside of the estate. Anattorney might consider requesting and updating their client’s beneficiary designation forms . Not doing so can cause problems because abeneficiary form is honored regardless of the date. Third, clients might want toconsider the beneficiaries’ circumstances to make sure that their needs are met.For example, a beneficiary with financial problems would benefit from a spendthrift clause. Arranging to accommodate beneficiaries in advance can preventfuture drama. Fourth, if your client owns a business, a well formulatedsuccession plan can avoid disasters and save his business. Most importantly, regardless of a client’s busy schedule he or she might want to make time to review and update his estate plan frequently to make sure it’s current. 

See Erik Hartstrom, 5 Estate Planning Black Holes, Life Health Pro, Jan. 31, 2013.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.