There is one estate-planning mistake that you could be making right now that could have devastating effects on your family after you pass. However, it’s an easy mistake to fix.
On every document you sign related to any asset, from your 401k to life insurance to social security, it will ask for the name of a beneficiary. At the time, it doesn’t seem very important. You say a name or write it in and move on.
It matters because the names on these documents trumps anything else that specifies who is to receive your assets when you die. You can have a legally sound will, power of attorney, or several other beneficiary designations that name the correct people. But, if you die and your 401k from your last job says the name of your ex-spouse, boyfriend/girlfriend, naming only 1 child because your forgot to change it when additional children came into your family.
Another consideration is that if your primary beneficiary dies before you do and your designations have not been updated, everything left to those beneficiaries will be held up in probate.
So what can you do to make sure all your beneficiaries are updated? Check all your documents every few years to ensure that your beneficiaries match. Review them again after a major life event, such as a birth, death, divorce, or marriage. It’s also smart to have a secondary beneficiary listed no matter what the age of your primary beneficiary.
As your attorney, I can help advise you on things to consider and things your should look at for your overall estate plan to make sure that your real estate, financial accounts are transferred to the people you intend. With a little bit of time and planning, you can provide for people you care about without a lot of hassle and expense (such as avoiding probate).
Over the past 32 years, the Law Offices of Christopher A. Benson has helped more than 800 clients prepare and utilize simple and effective planning techniques to protect them and their families in order to avoid probate, save estate taxes, save money and save added emotional burden that comes from long term illness and/or death of a family member. Give us a call to schedule a free consultation to find out how we can help you and your family.