When you set up an estate plan, you choose who you wish to leave things to. Yet, each year, many people do not manage to achieve this. They die, and some of their assets go to the wrong people.
If you make one of these estate planning errors, you will not see the consequences of your mistakes, but it will create confusion, heartbreak and hardship for the people you leave behind.
You need to review your estate plan regularly
You might think that you can make a will once and then forget about it. Yet estate planning covers much more than a simple will. You need to take all your property into account and ensure that you have a clear plan for it all. You then need to review this plan regularly and review it again when major life events occur or when you add or subtract assets.
You need to update your beneficiaries on your accounts
A will can only cover certain items. Accounts such as life insurance policies and retirement plans ask you to name a beneficiary when you take them out. If you took out life insurance 40 years ago and are now on your third marriage, you need to ensure you have updated the beneficiary designation to match.
The principal beneficiary of a failure to review your estate plan is often not a person but the IRS. An effective estate plan takes advantage of all the relevant tax allowances. These can change with time, and if you do not update your plan accordingly, the IRS may gain at the expense of your family.
Estate planning can be challenging, yet that is no excuse to avoid it. Seeking help to understand the options and changes in the law that affect them can ensure your estate plan benefits the right people.