How to avoid these common estate-planning errors

On Behalf of | Oct 23, 2018 | trusts

There are several common estate planning errors that North Carolinians should be careful to avoid. One frequent mistake is failing to fill out beneficiary designation forms for the assets that require them. These may include retirement accounts and life insurance policies.

Another mistake is setting up a trust but failing to fund it correctly. How assets are placed in a trust depends on the kind of asset. Some may need to be retitled, but there may be other procedures for different assets. Estate owners should be aware that assets with joint rights of survivorship do not pass using a will or a trust.

Family members need to know where they can find estate planning documents. This includes not just the will and the trust but any funeral instructions or other relevant information. A safety deposit box may be difficult for family members to access. There may also be digital information that the executor or others will need to be able to access. This is why it’s important to discuss the estate plan with loved ones as well as financial professionals or other professionals who may be involved in the estate. Finally, people should update their estate plans throughout their lives as circumstances change. Examples could be changes in family circumstances or an increase in assets.

It’s often wise to talk to an attorney about the various types of trusts that could be useful in an estate plan. These versatile vehicles can be set up to manage distributions for a loved one likely to be irresponsible with a large inheritance. Trusts can also be used to protect assets from creditors and save on taxes.