Avoid These Mistakes in Your Estate Plan

Before creating an estate plan, it is important for testators to consider their goals and options, while also being careful to avoid certain mistakes that could be damaging to the estate and the testator’s beneficiaries. One of the best way to avoid mistakes and a potential will contest is to speak with an experienced contested estates lawyer who can walk you through the process of creating a secure estate plan.

Failing to Update Beneficiaries

Failing to update one’s beneficiary designations, although it may seem like a simple mistake, could have serious consequences down the road, leading to conflict between heirs and beneficiaries and in some cases, to the contesting of the will itself. To avoid this, testators should be careful to review their estate plans periodically to ensure they still reflect their wishes. It’s especially important to conduct these reviews after major life changes, such as:

● Divorce;
● Marriage;
● The birth or adoption of a child; or
● The death of a loved one

These events could impact how a testator decides to bequeath his/her assets and so typically necessitate the updating of an estate plan. During this review process, it is also important for testators and their legal teams to review the payable on death designations on their assets, such as bank, life insurance and investment accounts to make sure they are still accurate.

Failing to Coordinate Trusts and Retirement Plans

Many trustors, when creating an estate plan, choose to designate their trusts as the beneficiaries of their retirement plans. While there are some advantages to naming a trust as a retirement plan or IRA beneficiary, there are also a number of disadvantages. For instance, designating the wrong type of trust as an IRA beneficiary can significantly increase the trust’s tax obligations. Furthermore, estate plans must contain specific language for a trust to be designated as a beneficiary of a retirement account and to retain its tax-free status.

Failing to Fund Revocable Trusts

Many estate plans include revocable trusts, as assets contained in these types of trusts don’t have to go through probate. The problem with many estates is owners fail to fund their trusts, or to transfer legal title to the assets to the trust itself, even after preparing and signing the agreement. This is especially common for certain types of assets. For instance, when it comes to transferring real estate to a trust, the creator of the trust must change the deed for the property to reflect the new owner is the trust. Similarly, vehicle registrations must be amended, while the name of record needs to be changed for financial accounts, which could also require opening a new account and transferring the assets from the older account into the newer.

Call Today for Help with Your Case

If you want to ensure your own estate is not contested, please contact the dedicated contested estates lawyers at Orlowsky & Wilson, Ltd. Attorneys at Law by calling our office at 847-325-5559 today. You can also schedule an initial case review with a member of our team by completing one of our brief online contact forms.

Updated as of July 2019
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