Easy Fixes for Your Estate Plan.
Too many people do the hard work of setting up a trust, and then they don't use it. It sits on the shelf, gathering dust ... like the Peloton bike now forgotten in the garage after a few months of diligent exercise.
This is one of several estate planning mistakes we see too often. Here are the most common oversights. Each is easy to fix.
Not funding your living trust.
Once you establish a living trust, also known as a revocable trust, make it the owner of your assets. Your living trust should own taxable brokerage accounts, bank accounts, second homes, other large investments, business interests and (in certain states) primary homes. That way, your heirs avoid probate when you die. A trust creates a tailored plan for who gets what, and when. It also keeps your financial affairs private.
Not updating retirement plan and life insurance beneficiaries.
Your retirement plans and life insurance death benefits go to whoever is named as a beneficiary, in the percentages you set out. They do not follow the instructions on your last will. Too often, people forget to update these after a divorce, when they marry, re-marry or have children, etc. Check and update these - it's easy.
Not having health care powers of attorney for adult children.
Once a child is legally an adult (typically age 18), parents have no ability to make health care decisions for them, even in an emergency. The solution: your child should name you (or their spouse or partner) as agent on their health care power of attorney. That document should give the agent access to their medical information and the ability to make decisions if the adult child is incapacitated.
Not reviewing all your documents every 7-10 years.
You may be surprised by what you decided some time ago. If your situation is more complex, you may find changes to tax laws have rendered your plan less effective than it could be.
Estate planning is important. Many people understand that, which is why they spend the time and money to create appropriate documents. Just make sure to finish the job
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