There are several categories of estate planning mistakes:
- A failure to make a plan.
- A failure to update a plan every few years or after major life events.
- Improperly executing the estate plan.
All of these errors can lead to the following problems when your estate is administered.
Unintentionally Probating Assets
Probate avoidance is a common estate planning strategy. However, there are a few ways you can accidentally end up putting assets into your probate estate.
One common error is failing to update beneficiary designations or failing to name a contingent beneficiary. If your primary beneficiary has already passed away, the account could end up passing to your estate which will cause it to be probated.
Another mistake involves revocable living trusts (RLT). Once you’ve created an RLT, you need to transfer all of your assets to the RLT. If an asset such as your primary residence remains in your own name, you’ll miss out on the probate avoidance benefits of the RLT.
Outdated Provisions
Outdated beneficiary designations are only one of the problems caused by a failure to update your estate plan. You can also face the following issues if your estate plan is gone several years without an update:
- Relying on laws that have since been changed.
- Naming specific property in your will that you no longer own.
- Outdated powers of attorney.
- Outdated guardianship provisions.
If you haven’t reviewed your estate plan in a few years, consult your attorney and go over all of your documents to look for these kinds of errors.
Devising Complex Assets
Care must be taken when leaving behind a business, real estate, or other complex assets. This is particularly true if your heirs don’t get along or have differing views on what to do with the property.
If you leave your home to two heirs who can’t stand to be around each other, they may have no choice but to sell the property. Family businesses are one of the hardest assets to leave behind, especially if your kids don’t have an interest in running the business.
There’s no easy solution to these issues, and each case presents its own unique factors. Contact an estate planning attorney to get help spotting potential problems with your estate plan.
King Law Offices is a full-service law firm with an outstanding team of professionals who work diligently, creatively, and compassionately on behalf of our clients each day. We serve the Upstate of South Carolina and Western North Carolina. Call 888-748-KING (5464) today to set up a consultation with one of our dedicated estate planning attorneys.