At Bulman Dunie, we regularly assist folks implementing a loved one’s estate plan after the loved one becomes ill or passes away.
Here are three common mistakes that we have observed are made with some degree of frequency – and how you can avoid them!
1. Never Forget About Beneficiary Designations
Beneficiary designations appoint an individual (or individuals) who will inherit an account upon your death.
A beneficiary designation trumps the terms of a will or trust. Put another way, if you intend for John Doe to inherit your entire estate, and you have a will or trust that says John Doe inherits your entire estate when you die, but you have a life insurance policy that still designates Jane Doe as the beneficiary of the policy, then your estate planning goals will be frustrated.
Think about all the accounts that you have. It is not uncommon for clients to have multiple retirement accounts from previous employers. In addition to retirement accounts, clients carry investment accounts, checking and savings accounts, and life insurance policies.
A periodic review of all your beneficiary designations is essential to ensure they align with your estate planning objectives.
2. Think Critically About the People You Have Named Within Your Documents
There is a lengthy “cast of characters” in every estate plan. We have medical decision-makers (a “Health Care Surrogate”), financial decision-makers (an “Agent”, “Personal Representative”, and/or “Trustee”), and guardians for children.
Are the people that you have named to these respective roles still the best to serve, given the passage of time? Did you name parents to these roles who are now aging? Did you prepare these documents when your children were very young, and now they are legal and responsible adults in their own right? Did you name children as co-decision-makers, but now they just don’t get along?
You can get ahead of and avoid potential heartburn, heartache, and complications by reviewing your documents to make sure your estate planning cast of characters is still Oscar-worthy.
3. Having Documents is One Important Piece – Information Sharing is Equally Important
We regularly consult with individuals who are tasked with administering the affairs of a loved one who has passed away or fallen ill.
These clients initially feel relief that their loved one has the requisite estate planning documents in place to affirm the client’s legal authority to act. However, all too often, we have clients who have the legal authority to act because their loved one had an estate plan, but found that it was nearly impossible to carry through their job because they lacked critical information.
Our liabilities don’t stop when we become ill or pass away. It is the Agent under a financial power of attorney or the Personal Representative under an estate that will take on the responsibility to manage these matters. With your documents, it is critical that you keep a “financial cheat sheet” of accounts, passwords, assets, and liabilities. For example:
- What bills do you pay? From what accounts? Are they on auto-payment?
- Do you get bills electronically? How could somebody log into your email to access your bills?
- What policies of disability insurance do you have? What about life insurance or long-term care insurance?
You can read more here about the information to include in your financial cheat sheet.
Periodic reviews of your estate plan with an estate planning attorney can help you easily avoid these mistakes. Contact the estate attorneys at Bulman Dunie to schedule your complimentary review. Attorney Jeremy Rachlin can be reached at (301) 656-1177 x305 or jrachlin@bulmandunie.com. Attorney Liz Farley can be reached at (301) 656-1177 x306 or lfarley@bulmandunie.com.
