Putting together an estate plan means paying attention to details and updating plan documents as necessary. For instance, putting assets in a trust may remove the need to go through probate, which could provide greater privacy for the family when taking care of the deceased’s assets. However, it is a common mistake to establish a trust and then forget to fund it.
If assets are not titled in the name of the trust, it could negate the existence of the trust itself. In lieu of funding the trust during life, it may be worthwhile to create a pour over will. This will put assets into the trust automatically when a person passes away. A good reason to review plan documents is because an individual’s needs may change or estate tax laws may change.
An example of one such change is the estate tax exemption. It has gone in and out of existence in the past and is indexed to inflation today. Therefore, it may be worthwhile to update a will or a trust to account for this exemption when estate planning. Furthermore, it may be worthwhile to review beneficiary designations as those generally trump what is said in a will or trust. Those who are giving money or other assets to children may wish to wait until the children are old enough to directly collect the money or other asset.
Those who wish to create or update their estate plan may do so with the help of an estate planning attorney. An attorney can create plan documents or review existing documents to ensure that they meet the needs of an individual and any future heirs if necessary. Reviewing these documents periodically may increase the odds that they hold up to legal challenges and that an individual’s wishes are carried out correctly.
Source: CNBC, “Trust bust: Steer clear of the 8 biggest estate-planning mistakes“, Barry Glassman, January 03, 2015
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