8 common estate planning mistakes

Sometimes others don’t make use of a person’s plan after that person has signed the documents, says Karen Van Voorhis, a CFP at Daniel J. Galli & Associates in Norwell, Massachusetts.

This is particularly true for trusts, which allow a third party to hold assets, such as a house, on behalf of beneficiaries. She said to ask yourself: Why did you set it up — to own your

house or some other assets? If you don’t know how to use your trust, ask your attorney. 3. WILLS THAT SPECIFY INVESTMENTS If your plan names investments you wish to leave to one or more of

your beneficiaries, make sure that you still own them, experts warn. If not, your estate may be required to buy them at higher current prices, which would hurt your beneficiaries. In the

worst case, that purchase might drain most or all of the assets from your estate. 4. PLANS THAT DON’T COMPLY WITH CURRENT LAWS Failing to update a plan can make it worthless due to changes

in the law and the people named in it, Serra says. He once reviewed a will created in 1976. “There was a long, tedious process of settling the estate, resulting in unnecessary expenses and

family strife. Pay an attorney now or pay the price later.” Deshayes suggests revisiting your plan every three years or more often, as needed. He recalls one plan that listed elderly

parents, who had died, as guardians of kids who were already in their 30s. If the trust document is outdated, the trustee will be required to execute things in a certain way that may not

make sense now. 5. BENEFICIARY CONFLICTS AND MISTAKES Beneficiaries also need careful attention, says A. Raymond Benton, a CFP at Benton & Company in Denver, Colorado. “Review

retirement plans, IRAs and annuity contracts and make sure that beneficiary designations do not conflict with your documents.” Be sure to update beneficiaries on insurance policies and

401(k) plans in the event of a divorce, says Herschel Clanton, a CFP at Chancellor Wealth Management in Atlanta. “I’ve seen the ex-wife as beneficiary, which disappointed the current wife

when the husband died. The insurance company and the 401(k) provider paid the beneficiary of the policy as written.” Don’t forget to name contingent (or backup) beneficiaries, so the assets

don’t end up in probate should a beneficiary die, says Lindsay Graves, an elder law attorney and a founding partner of the Graves Law Firm in North Canton, Ohio. Be sure to include bank

accounts. Many banks offer “payable on death” designations that allow an account to pass to a beneficiary upon the death of the original owner, says Joey Loss, a CFP at Delegated Planning,

Inc., in Jacksonville, Florida. “Establishing joint titling on bank accounts for couples and beneficiary designations, whenever possible, can dramatically streamline the estate resolution

process.”