How to avoid common estate planning errors

On Behalf of | Dec 4, 2018 | Estate Planning | 0 comments

People in Tennessee who are creating an estate plan can take steps to avoid three common mistakes. The first is not leaving a list of all assets and how they can be accessed. Even people who create a list can make the mistake of leaving important items off. From bank to brokerage accounts and life insurance policies to digital assets, such as Instagram accounts, people may have many assets that are protected by passwords as well as other personal information ranging from names of pets to first teachers and more. On top of that, there may be additional assets that have sentimental value. Everything should go on the list.

Failing to correctly designate beneficiaries is another common error. Many people are unaware that some assets, such as retirement accounts, must be passed down using beneficiary designations. Saying what should happen to these assets in a will or a trust is not sufficient, and if other documents contradict the beneficiary designation, the beneficiary designation overrides them. This could lead to a situation in which an unintended person gets the asset, or it ends up in probate or in a legal battle.

Beneficiary designations are not the only documents that need to be reviewed periodically. The entire estate plan should be regularly reviewed and updated as families and assets change.

Failing to create an estate plan at all is one of the most common mistakes. Some people may think estate planning is only for people who are older or who have many assets, but estate planning is important for all adults. One element of an estate plan is appointing people to manage a person’s finances and healthcare if the person is incapacitated. An estate plan is also important for people who have minor children. A will may be used to appoint a guardian for them.