Strategies to avoid common estate planning missteps

On Behalf of | Oct 29, 2021 | Estate Planning

Creating an estate plan is a wise step in California. People who do so are preparing for the future not just for themselves, but for loved ones as well. However, simply creating an estate plan does not automatically mean it is devoid of mistakes. On the contrary, there are common errors people might make and it can cause a litany of problems after they have passed on. This can sabotage even the most well-thought-out documents and be costly personally, financially and emotionally.

Being aware of frequently made estate planning mistakes can prevent them

Although there are many errors that can be made in an estate plan, some happen more often than others. Financial missteps are a persistent challenge. People might name a person in a will and leave them money. Still, the testator could have given the money to the person as a gift while they were alive, but not made subsequent changes to the will to express that. This could lead to the heir getting more than what the testator intended. Or it could stoke confusion in general and spark a dispute during probate.

Those who have a trust must make certain there are sufficient assets to fund it. Since portfolios can fluctuate in value, this could lead to a lack of funds to cover all the trust was intended to. Some assets are subject to probate and others are not. If an asset is non-probate, it is passes to the other person separately from the will. That could be part of joint ownership in a property. For those who want to add a joint owner to a property, it is exceedingly simple to do as it is only a matter of adding that person as an owner.

Finally, a prevalent mistake is not updating beneficiary designations. Life insurance policies and retirement accounts are two examples of where this could be a problem. If, for example, there is a divorce. A testator might neglect to change the insurance policy designation even if the will was updated. The former spouse will get the proceeds if he or she is the named beneficiary.

Creating or updating an estate plan requires experienced assistance

Whether a person has yet to create an estate plan, wants to make changes to an existing estate plan or has concerns that they may have made an error, having professional estate planning assistance is critical. This is true for those with a large family and significant assets and for people with smaller estates. To keep from making problematic gaffes, having guidance with the entire process is imperative.