Avoid hidden estate planning mistakes

by | Mar 9, 2017 | Estate Planning |

Many Texas residents and others throughout the country don’t have a will. They have given little to no thought about estate planning, perhaps because they don’t think it is necessary. However, even those with modest assets can benefit from having a plan in place. It is equally as important to carefully review an estate plan to avoid potential problems in the future.

Those people who have taken the time to put estate plans in place tend to believe that, because they have a formal document signed by all the necessary parties, they will not have any issues. However, financial experts report that problems frequently arise when investors have not properly reviewed and updated their plans. Unfortunately, when these types of problems are discovered, it is too late to remedy them.

Issues often arise when clients have been previously married and begin to update estate planning documents. Pitfalls can occur when beneficiaries are changed on some documents but not others. For example, someone updates the beneficiaries on the trust documents but fails to change them in a specific investment account. Upon someone’s passing, the latest beneficiary designation must be followed to distribute proceeds. This may not be the intent of the deceased, but those steps will be followed since appropriate changes to all estate documents were not made.

Experts argue that even those with no formal plan in place are, in effect, engaging in estate planning every time they name a beneficiary on an investment account. Those designations take precedence over what is specified in a will or trust. Failing to properly determine exactly how an estate should be handled upon a person’s death can lead to horrific tax burdens for survivors.

Estate planning is essential in protecting loved ones after someone’s passing. To avoid creating a difficult situation for their surviving family members, many investors seek the advice of a Texas attorney experienced in estate planning. A lawyer familiar with retirement financial issues can help someone have the confidence that his or her intentions are executed properly.

Source: marketwatch.com, “Hidden estate planning mistakes that have horrible consequences“, Dana Anspach, March 3, 2017


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