An estate plan is a tool that everyone should consider taking advantage of because it allows people to make plans for the future. While an estate plan helps to outline plans for a time when the testator is no longer walking this earth, it also outlines wishes should a person not have the ability to make decisions on their own. There are several ways that an estate plan can provide grantors and their families with the upper hand during what will likely be a deeply challenging time. While developing an estate plan can be incredibly useful, it’s possible to experience several problems when not executed properly. As an estate planning lawyer Knoxville, TN recommended from Carpenter & Lewis PLLC will share the following, are common problems that may arise and mistakes that can occur with an estate plan:
Not Sharing the Estate Plan with Loved Ones
Once an estate plan has been developed, many may lock it away for when the time comes for it to come into play. However, those planning their estate are making a severe mistake. While the person planning their estate doesn’t have to share every detail of their estate plan, it’s essential to communicate their wishes with their loved ones at least. There are several reasons to share the contents of an estate plan with loved ones and family members. In addition to sharing where the family can find the estate plan, it’s important to share some details because it can give those involved the opportunity to ask questions and gain clarity. In addition, if anyone has been intentionally left out of the estate plan, while it may be challenging, it’s imperative to discuss the reasons behind these decisions with them.
Developing an Estate Plan without a Professional
An estate plan is a tool for not only outlining a person’s wishes but also determining how assets will be distributed. When considering an estate plan and what should be included, the process can be overwhelming, especially for someone not trained in the legal aspects of developing an estate plan. Because of this, it may be in a person’s best interest to speak with a legal professional for several reasons, for example:
- Create an estate plan that is developed under state and federal laws
- To make considerations around tax planning
- To ensure that all documents are properly executed
- To provide guidance for which tools should be utilized within the estate plan
- Can help make sure that young children are protected
Failing to Name Back-Up Beneficiaries
One of the most straightforward steps that an estate planner should take advantage of is naming beneficiaries on all accounts. This should include bank accounts, retirement accounts, and more. However, it’s important to know that the process doesn’t stop there. Those developing an estate plan should also make sure that they name one or two backup beneficiaries on these accounts because should something happen to the primary beneficiary, there will be no one named on these accounts. As a result, complications may follow as these assets may be required to pass through probate.
Not Regularly Updating the Estate Plan
One of the most common mistakes people make after they develop an estate plan is putting it on a shelf and leaving it for when the time comes. This could be detrimental for several reasons. People do not often lead stagnant lives, they change over the years, and an estate plan should reflect these changes. An estate plan should be reviewed and updated at least every 3-5 years or when changes occur in a person’s life, such as divorce, marriage, the birth or adoption of children, changes in wealth, moves out of state, and more.