During the current global pandemic, there’s been a rush for people to obtain insurance and update their legal documents such as Powers of Attorney, Wills and Revocable Trusts. While updating your legal documents is a smart step, people frequently forget key actions that can be critical to the implementation of your wishes for you and your loved ones. Here’s a list of eight easy estate planning tips that people frequently forget, and that subsequently can create big problems.


1. Update Your Beneficiary Designations

Hands down, the most common oversight in estate planning is forgetting to update your beneficiary designations. People often believe that their Will or Revocable Trust document will dictate the distribution of assets upon their death. The reality is that any assets or accounts that have named beneficiary designations are distributed based upon the beneficiary language, regardless of what is stated in your Will or Trust.

It’s critical to ensure that your beneficiary designations align with your current wishes, which might have changed over years or decades.
The most common assets to have beneficiary designations include:

– 401(k), 403(b), TSP or other retirement accounts
– IRA and Roth IRA accounts
– Pay on Death Accounts
– Transfer on Death Accounts
– Life Insurance
– Annuities

When you’re updating your designations, it’s important to consider if per stirpes language is appropriate or if any assets should be held in Trust for one or more individuals.

Per stirpes language means that if a named beneficiary predeceases you, his or her children will receive his or her share.
– If assets should be held in Trust for anyone, you often need to submit specific supplemental language from your attorney to ensure your wishes are correctly fulfilled.

2. Retitle Your Assets

Planning initiatives that your attorney puts into effect frequently hinge upon proper titling of assets. This might include naming your accounts, your house, or your possessions in the name of your Revocable Trust. Perhaps assets need to be held Tenants in Common versus Joint with Rights of Survivorship. All estate plans are different, but it’s important that you review actions recommended by your attorney and ask if any ownership changes are required.

3. Joint Accounts with Non-Spouse Family Members

Individuals frequently open accounts with non-spouse family members to ensure that someone can access funds and pay bills in the event of an illness or a death. This approach can be an easy solution. However, it can also create unintended family inequities as the joint account owner could receive the full account balance upon your death. Any such accounts should be carefully reviewed, especially if they hold meaningful balances.

4. Survivor Benefits

If you qualify for any pensions, such pension might allow survivor benefits to be paid upon your death. It’s important to review your elections to ensure you’ve made selections that align with your wishes. This is particularly important if you’ve ever been divorced.

5. Marital Separation Agreement Requirements

If you’ve been divorced and have a marital separation agreement, that agreement could embed requirements to provide for your ex-spouse upon your death. A common example is that you own life insurance with your ex-spouse named as the beneficiary. If any provisions are included in your agreement, it’s important to ensure that you will fulfill your obligations to avoid potential legal actions.

6. Trustee Changes

If you have a Trust and later modify the Trust to add or remove a Trustee, it’s imperative that you properly update any accounts to reflect all current Trustees. Changing the document alone without updating records with financial institutions could create a challenging scenario to resolve.

7. Charitable Gift Funds

If you have a charitable gift fund or donor advised fund, it’s important to consider how any remaining assets will be managed or distributed upon your death. Two common practices include naming charitable organizations to receive the assets upon your death or naming a successor agent to manage the account post your death.

8. You’ve Moved to a New State

People frequently don’t realize that their documents might not work or be valid if they were drafted and executed in a different state. Most documents must conform with the laws of the state in which you reside. If you’ve moved since you last executed your planning documents, it could be essential to update them now.

SageVest Wealth Management always offers to participate in meetings and discussions with your attorney or other professionals. Doing so helps to ensure decisions align with your financial and family objectives. It also allows us to help with proper implementation. Please contact us to discuss any changes you might have recently implemented or are contemplating. We’re happy to be of assistance for the benefit of you and those you love.

Prepared by SageVest Wealth Management. Copyright 2020.

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