While many people set out to craft air-tight estate plans to be followed in the event of their passing, the entire process is filled with pitfalls that can limit a plan’s effectiveness. A recent article regarding estate planning discusses some of these mistakes and the different ways that a person might avoid them.
One key mistake is choosing the wrong people when deciding who should carry out the plan. A person setting out their plans for their estate should make sure that the chosen executor is mentally and emotionally capable of making the more difficult decisions that are included in his or her duties. It is also important to keep beneficiary information in both the estate plan and in IRA, 401k, and insurance benefit documents up to date. Checking that information frequently and adding or removing beneficiaries when necessary might the administration of the estate go more smoothly.
It might also be a good idea to select alternate beneficiaries. When these contingent individuals are chosen, it might help ensure that the assets held in the estate are awarded to a person rather than given to the state if the primary recipients are incapable of or unwilling to take any inheritance left to them. In addition, it might be beneficial to confirm that those appointed to execute and benefit from the estate have the best interests of everyone involved at heart. This can help avoid conflict and legal intervention down the road.
While avoiding these mistakes might have a positive influence on the estate planning process, these are only some of the common mistakes that a person might make when drafting a will. An attorney who is familiar with estate planning strategies might be able to help a client build an effective plan.
Source: Investing Daily, “Key Estate Planning Mistakes You Need to Avoid“, Bob Carlson, July 24, 2014