Mistake #4 closely relates to Mistake #3 that was addressed in a previous blog post as it focuses on your assets. Not all of your assets will need to be titled into the name of your trust, some assets have a built-in estate plan and allow you to name direct beneficiaries. Examples of these assets include 401ks, annuities and life insurance plans. With these, asset mistakes occur when you designate beneficiaries without taking into account your estate plan or your beneficiaries situation.
When you name beneficiaries on these kinds of assets they will receive a lump sum of cash when you pass away. Having your beneficiaries receive a lump sum of money may not be your intention. If in your trust you have set up provisions to protect a child who is not good with finances or maybe you set up a divorce protection trust for one of your beneficiaries those provisions will not be followed by assets that bypass your estate plan.
If you have assets that will bypass your trust and you never discussed it with your attorney or if you’ve acquired these kinds of assets since your plan was created you should review your beneficiary designations and your estate plan to ensure that you are not making this mistake.