Negligence in estate planning is problematic.
Estate planning may seem like a vague concept.
Many people believe merely giving thought to your estate is sufficient for estate planning.
They have an idea of who should get what.
It is simple.
According to a recent Investopedia article titled “5 Ways to Mess Up Estate Planning,” this kind of thinking will get you in trouble.
The truth is estate planning needs to be intentional and thorough.
There are many ways to leave a mess for your loved ones.
What are they?
Neglecting to update beneficiary designations.
Do you have IRAs, 401(k)s, or life insurance policies?
Most of these assets pass directly to beneficiaries through designations within the account.
You will want to review these after life changes such as marriage, remarriage, divorce, births, or deaths in the family.
The last thing you want is an ex-spouse to receive your money.
Overlooking important legal documents.
Let us say you created a revocable living trust.
You figured this would be a good idea to keep major assets out of probate.
Surely you do not need a will.
You may still need a will as it does more than instruct probate courts how to distribute assets.
For example, a will is the primary tool used to name guardians for minor children and to "fund" the trust with assets subject to probate.
Are you a messy person?
If yes, you should take steps now to organize your assets.
When you have done so, leave a letter of instruction for your executor.
This will help him know what he needs to do to gain access to accounts.
Breakdown in communication.
If your loved ones expect one thing and you do another, it can cause pain and confusion.
Do not leave them with these wounds.
Take the time to create a letter explaining your intentions and your reasons.
The worst thing you can do is to not create a plan.
Even if you do desire to do so in the future, you do not know when you will die.
Take action now.
This will save time, unnecessary grief, and money in the settlement of your estate.
Work with an experienced estate planning attorney to walk you through the creation of a plan to meet your needs and the needs of your family.
Reference: Investopedia (September 30, 2018) “5 Ways to Mess Up Estate Planning”