It’s easy to avoid making an estate plan, but not having one won’t be easy on your loved ones. Having your affairs in order can be a big help to your family, so consider creating a comprehensive estate plan. Unfortunately, there are many easy-to-overlook estate planning mistakes, such as not naming beneficiaries on retirement accounts, not doing so properly, or forgetting to update your estate plan.
Not Naming Beneficiaries
Many people don’t realize that they need to name a beneficiary for retirement accounts and life insurance policies. They may never get around to filling out the forms, or they may assume that these will automatically go to their spouse or children. If you do not name a beneficiary for life insurance or retirement accounts, then the financial company has its own rules about where the assets will go after your passing. Even if you named a beneficiary in your will or trust, you need to name the same beneficiary on your retirement account because beneficiary designations trump will and trust directives.
Getting Their Names Wrong
This may seem crazy, but it’s more common than you might think. It can be easy to forget to put “Jr.” or “III” after someone’s name. Make sure the name you put down matches that person’s birth certificate exactly or matches their current legal name if it has changed due to marriage, divorce, or any other reason. Not having the names match could result in delays in getting that person their inheritance, or could lead to a legal dispute between two people in the family with similar names.
Not Updating Your Estate Plan
There are many reasons why you might need to update your estate plan, including changes in estate law, the tax code, and personal changes. For example, if you’ve designated your daughter as the beneficiary of a life insurance policy and she gets married and changes her name, you may need to update your designation. Similarly, divorces, legal name changes, deaths, and births in the family can mean that you need to revisit your estate plan and update names in any important legal documents.
Not Seeking Professional Advice
Some people think that having an estate plan is only for billionaires, but this isn’t the case. If you have assets that you want to pass onto your loved ones, you may need to create a will or a trust, as well as name beneficiaries for certain assets. There are many tax considerations when creating an estate plan, and a professional can help you in that area. These rules are always subject to change, so remember to revisit your estate plan every few years with a professional to see if it needs to change in light of new laws. We can help you create an estate plan that is integrated with your overall retirement plan. Sign up for a time to speak to us about how we can help you get started or help you update your estate plan.
Investment advice is offered through APO Financial Services, LLC (“APO”) 10155 Westmoor Drive, Suite 175, Westminster, Colorado 80021-2627. APO Financial Services is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration with the SEC as an investment adviser should not be construed to imply that the SEC has approved or endorsed qualifications or the services Eric Scott Financial and/or APO Financial Services offers, or that its personnel possess a particular level of skill, expertise or training. Additional information pertaining to APO’s registration status, its business operations, services and fees, and its current written disclosure statement is available on the SECs Investment Adviser public website at https://apofinancial.com/disclosure/.