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The estate planning update mistake you’ll want to avoid

On Behalf of | Sep 27, 2023 | Estate Planning |

Estate planning is generally an ongoing process. People usually need to add to their estate plans and update their documents throughout their lives. They might remove beneficiaries or add new ones, they might even integrate entirely new documents as they age or their family circumstances change.

Particularly when people have experienced a major shift in family circumstances, they may need to drastically overhaul their estate planning paperwork. When doing so, testators need to be careful that they don’t make one very common mistake.

They may not update all the documents that they should

People revisiting an estate plan will often focus on the documents that they drafted with an attorney, including wills or powers of attorney. They will change who receives property, who holds authority and what assets they discuss to make the documents as accurate as possible.

Having those documents up-to-date is obviously important, but it is not the only revision people need to make. Certain asset designations will require special paperwork. If someone has life insurance, for example, their will does not determine who receives the payout from the policy. They will need to file updated paperwork with the insurance company to change the beneficiary that they named to someone new. The same is true of situations in which people have executed transfer-on-death paperwork for specific financial accounts. They will need to update the documents submitted to the financial institution in addition to making adjustments to their personal testamentary documents.

Those who update every appropriate document at the same time can avoid a situation in which a prior estate plan undermines their actual legacy goals. And ultimately, avoiding common mistakes and oversights can help people to maximize the protection they secure from their estate planning efforts.