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The 6 Biggest Estate Planning Mistakes 5&6

If you’re like most people, you have the best of intentions with regard to how you want your estate distributed when you die or your affairs handled should you become incapacitated. Unfortunately, without proper planning, your best intentions may not be enough. In the last article, we discussed two common estate planning mistakes:  Not planning for Disability and Failing to Fund a Trust.  Here are the fifth and sixth most common estate planning problems we see:

  1. Not checking your beneficiary designations. You should periodically review your retirement plan, life insurance and annuity beneficiary designations to make sure they aren’t outdated. These accounts do not follow your will or trust—they are distributed according to the forms you fill out with the insurance company. You need to make sure you have a PRIMARY and SECONDARY beneficiary. 

For example, you probably named your spouse as the primary beneficiary when you initially set up the account.  Is your spouse still alive?  Is your spouse still competent to manage the assets should you predecease your spouse?  Who are the secondary beneficiaries?  If you’ve named your children, are all of the children still alive and in good physical and financial health?  If any of the above answers is “no,” the beneficiary designation needs to be discussed and updated.

  1. Not reviewing the plan. Once you’ve got an estate plan in place, it is important to keep it up to date. Circumstances change over time and your estate plan needs to keep up with these changes. If one spouse has a debilitating disease or long term care issue, the goals of your estate plan will change.  What was a great estate plan 10 years ago may be very problematic as you and your spouse age.

Even if you don’t have any major changes, you should review your plan periodically to make sure it still expresses your wishes.

That concludes our list of the Six Most Common Estate Planning Mistakes.  Certainly, this list is not all-inclusive and other mistakes are common.  As I’ve mentioned before, estate planning is not a “one size fits all” proposition, and each family has its own set of facts and circumstances that will influence your estate plan.

To ensure that you’re not making these and other common estate planning mistakes, give us a call today for an office or home-visit.