On its face, estate planning may seem simple. After all, many people think that having a simple will is enough to suit their needs. While this may be the case for some individuals, you shouldn’t fall into the trap of thinking that you need a cookie-cutter approach to your estate plan. Your loved ones, and your estate, deserves better. This is why you need to consider how best to custom-tailor your estate plan to fit your unique wishes.
There are a number of ways to work your plan to ensure its furthering your and your loved ones’ best interests. However, one of the most important, and often overlooked, aspects of estate planning is the beneficiary designation. Some retirement accounts, life insurance policies, and annuities typically require that a beneficiary be named. While this may not seem like a problem, certain life changes should prompt a change in beneficiary designation, but many people neglect to address the matter. This can be disastrous for your estate plan given that it can lead to assets being dispersed to individuals you never wanted to inherit in the first place.
So why do people fail to change their beneficiary designations? There are a number of reasons:
- They think they their will takes precedent over a beneficiary designation when, in reality, it doesn’t.
- Individuals may simply forget about certain retirement accounts and who is named as a beneficiary of each account, especially if they are sitting with various employers.
- Beneficiaries can pass away before the person who holds the asset in question, which can lead to some portion of the family being cut out the inheritance altogether.
What should you do to avoid this error? To start, you need to know exactly what you want out of your estate plan. That’s the only way to know for sure how to act in furtherance of your goals. Second, you should craft your estate plan in a holistic and thorough fashion that meets your needs. Third, you need to make sure you revisit your estate plan periodically to make any changes that are necessary based on life events such as a marriage, death, birth, or merely a changed relationship, like a falling out with a child or a sibling.
If you feel overwhelmed by the mere thought of the estate planning process, you’re not alone. Many Floridians are so daunted by estate planning that they choose to procrastinate, oftentimes until it’s too late. Don’t let this happen to you. Skilled legal professionals can walk you through every step of the process to ensure that you, your estate, and your loved ones are as fully protected as possible.
