Hi there, Bridget Mackay, Law offices of Bridget Mackay here in Petaluma, California. I practice in the area of estate planning and elder law. And today I want to talk to you about the seven deadly mistakes in an estate plan and how to avoid them.
So, the first is, or the first deadly mistake is not understanding your plan. A lot of you got a plan with an attorney, might have been explained at that time. It’s been some years and you don’t really understand what your plan does. Always look at it and if you don’t understand it, make an appointment with your attorney and have them explain it to you again or answer your questions. You should always know what’s in your plan and how it’s going to work if something were to happen to you.
The second is, outdated beneficiary designation. So, we see a lot of plans come through at the administration side. So, someone has died, their family is coming in. We’re telling them what the beneficiary designations are, and they’re all outdated. Someone has died, their circumstances has changed and there’s really nothing they can do about that or if there is it often involves litigation. So, keep your beneficiary designations up to date in your plan.
The other problem or the third is not updating your asset ownership. Part of having a trust is not just having the document but also having all your assets titled in the trust. All those that should be, so you want to stay on top of that. And usually your estate planner can always help you with that or your financial planner.
Fourth is coordinating your trust beneficiaries with your retirement accounts. Sometimes trust as a beneficiary of an IRA or a 401k makes sense. Oftentimes it doesn’t. There can be some potential down, down reasons for it which would expose you to more taxes or accelerate tax payments. Definitely have a conversation with your financial planner or your estate planner around those issues.
The fifth is not updating your powers of attorney. So again, having a non-updated plan where you haven’t looked recently about who your durable power of attorney for finances is. If something were to happen to you or to your health decision maker is if something were to happen to you is no longer valid for you. Keep those updated as well.
The sixth is updating your plan entirely. We’ve talked about beneficiary’s, we’ve talked about keeping the assets in the trust. But there may be other things in your trust that also need to be looked at and updated.
And the last is failing to fund your trust which means there are assets out there that are still in your individual name and not in the name of the trust. And they should be and that will trigger a probate should you die.
So, the bottom line is is to avoid these seven mistakes that we see are common in trust administrations here is to regularly go into your estate planner and have all of these things looked at and updated. In our office, we have clients come in every three years for a free appointment to just look at all of these things and make sure everything’s up to date.