Avoid These Estate Planning Errors

While many people fail to plan for death, even those who make the effort to plan their estates often neglect to follow through or update their plans as changes occur in their lives.  So that your estate plan may remain a valuable asset for you and your heirs, avoid these common mistakes:

• Thinking the state will handle everything. It is a common misconception to think that trusts are for the wealthy and you have covered your bases with a will.  However, with a will, your estate may have to go through a public probate process and can be expensive.  If you have a trust, it eliminates the probate process for assets and ensures privacy.
• Your work is done after a trust is created. Many people forget to fund their revocable trust.  The trust does not exist unless it holds assets. 
• Settling and forgetting. This means that clients will often set up their estate planning documents and rarely look at them again.  Life changes and your needs, as well as your children’s, may be different.  Thus, updating a will is crucial.
• Your assets will follow your trust or will. Beneficiary forms govern retirement accounts and insurance policies; the assets do not flow through your trust or will.  Whomever you designated as your beneficiary will get the money when you die.
• Not considering your children’s needs. Each child can be different, and there may be times to treat them differently when it comes to disbursing their inheritance.

See Barry Glassman, Trust Bust: Steer Clear of the 8 Biggest Estate-Planning Mistakes, CNBC, Oct. 22, 2014.

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