Perhaps the loss of a loved one years ago prompted you to make your own estate plan. Maybe you watched another family struggle and bicker after a parent died without leaving a will, and you vowed that would never happen to your family.
Setting an appointment with an attorney to establish a solid plan for your ultimate future certainly took courage, but you were probably relieved and a little proud of yourself to check it off your to-do list. However, that was years ago. When was the last time you reviewed that plan?
Common estate planning mistakes
Many people in California plan their estates hoping to prevent disputes among their survivors. However, an outdated plan may cause just as much confusion as no plan at all. If your life has gone through any changes -- and whose hasn't? -- it may be time to take a second look at your estate plan. Some of the elements of your plan that may need revision include:
- Your estate executor: While it may seem easiest to designate your oldest child as your representative, time may have proved that another person is more capable or willing to handle the enormous responsibility. In fact, you may feel that none of your children is up to the task, in which case hiring a professional may be the best solution.
- The assets in your revocable trust: Are all your assets titled in your trust? If you have sold or purchased property, you may need to revise this information and confirm that the trust is properly funded.
- Your beneficiary designations: Getting married, getting re-married or going through a divorce is stressful, and the last thing on your mind may have been the names on your life insurance or retirement policies. Likewise, if you have had children or grandchildren, you may want them to inherit some of your assets. Failing to include them may result in confusion and resentment.
- Tax changes and estate planning laws: Laws concerning estates and inheritances change frequently, and you may have missed changes that can seriously affect your plan and your heirs.
After making any modifications in your plan, advisers recommend discussing your plan with your family. Letting your loved ones know ahead of time what they can expect when you pass away may reduce the chances of unpleasant surprises growing into painful disputes.
Creating an estate plan is one of the most loving things you can do for your family. It can alleviate some of the stress and uncertainty that often follows a loved one's death. However, failing to keep your plan up to date and relevant may defeat the purpose of creating it. A carefully structured and current estate plan will certainly go far in fulfilling your wishes.