It is January, so naturally drafting a will is on many people’s new year’s resolution list. We are happy to help you accomplish this goal and make sure you are protected. To help, here are some common estate planning mistakes people make and how you can avoid them.
First, avoid relying on old or unsigned documents. Too often people show us their existing estate plan, and some of the documents have never been or, their documents are outdated and do not reflect changes in the law. It’s important not only to ensure your documents are signed, but that you review them (ideally with an attorney) every few years. We are happy to review them with you if you are concerned about making this mistake.
A second mistake people often make is adding another person to a bank account. Many people add another person’s name to a bank or investment account, thus creating a joint account. An elderly person may add a child to an account, for example, typically either for convenience or because they believe the assets will be protected from creditors or a nursing home. Doing so is not bad in and of itself, but there can be unintended consequences. You should make sure you understand these consequences before creating a joint account. We are happy to discuss how to prevent any unintended or negative consequences with you before you do so or to help mitigate and undo any negative results after you have done so.
Lastly, one of the most common mistake is that people do not compete or incorrectly compete their beneficiary designation forms. A significant portion of your wealth may be in life insurance policies, retirement plans, or annuities. These assets pass to the designated beneficiaries pursuant to the beneficiary designation form. They do not pass under your Will (unless there is no designation form, in which case the proceeds pass under your estate). It’s important that you review these designation forms to ensure they are properly filled out and they accurately reflect your wishes. In addition, if there is no beneficiary designation form, there can be significant adverse tax consequences. We help make sure our clients follow through with this last step of estate planning and know exactly who to list to accomplish their goals.
Please contact J. Redmond Law for a free consultation to discuss these issues or any other estate planning questions you may have. We are happy to help.