Your estate plan outlines who gets what when you pass away. It is imperative that you understand what your plan says and that it is up to date. You should review it at least once per year so that you can see that everything is set how you want it.
There are some mistakes that you can make when you are setting up or updating your plan. You need to ensure that you avoid these. Here are some common considerations that are often overlooked:
- Improper designations. There are limitations to what your will can do. Some assets, such as bank accounts and other financial accounts, are governed by payable-on-death designations. Even if you name the asset in the will, the POD designation will trump it. When you review your will, review these so they are up to date.
- Not fund trusts. The trusts that you establish should be funded. While there are some that are funded when you pass away, you need to ensure that you consider the funding options for the others.
- Forgetting a power of attorney. You should set up the power of attorney designations for someone to oversee your health care and your finances if you become unable to. You need to ensure that these are kept current.
- Failing to understand the estate plan. As you make the estate plan, don’t be afraid to ask questions. You need to understand exactly what the plan is doing. This helps you ensure that you are setting it all up the way you intend.
There are many factors that might impact how you set up your estate plan. Reviewing the options for making your wishes clear and as easy to follow as possible can help you now and will help your heirs later.