1. “I thought I had signed this will and trust agreement!” Unsigned documents are not enforceable until they have been properly executed. You should review and update your estate planning documents as personal situations change and, at a minimum, every five years. Poor planning and out-of-date documents can be worse than no plan at all. Make sure your documents are up to date and have been fully executed. The executed documents should be placed in your lock-box or left with a trusted advisor.
2. Untitled or wrongly titled assets. Sometimes the best laid plans of mice and men do go awry. If using a trust, you must follow through with your plan by titling assets in the name of the trust. Otherwise, the asset will be disposed of by your will or, in the case of life insurance, the named beneficiary. Your high priced documents are only good for kindling if you fail to re-title assets or change beneficiaries of life insurance policies to your trust.
3. Naming family members as power holders. Why create problems where there were none or exacerbate existing problems? By naming family members as your executor or trustee, for example, you are placing them in the line of fire needlessly. Do family members have the knowledge and/or experience to carry out your wishes as set out in your documents? Why not name a disinterested third party who has the experience and knowledge to carry out the terms of your documents? This would help keep peace in the family. Let the third party take the heat in carrying out your wishes that may not be popular with some family members.
4. Leaving assets outright to beneficiaries. In doing so, the inheritance you wanted to pass to your heirs leaves the inheritance unprotected from her/his creditors, divorcing spouses, lawsuits and unsavory significant others. You may also have an heir that has physical or other disabilities that requires a Special Needs Trust.
5. Are your beneficiary designations up to date? Your beneficiary designations need to be reviewed for your life insurance policies, 401(k) plan, 403(b) accounts, annuities, IRAs, etc. It is easy to overlook changes that occur in your extended family as a result of deaths, marriages, births, divorces, etc. These changes could have a dramatic effect on your estate plan.
6. Computer passwords. You should prepare a list of your computer user name and passwords for accounts and files kept on your personal computer. Remember to keep them in a safe place
7. Lack of medical care/end of life planning also needs to be kept current. You need to be sure your desires regarding medical care during your final days are up to date. Review your Health Care Power of Attorney, Living Will, HIPPA forms, etc.
8. You may want to consider writing a letter to your family to be opened upon your death. These letters usually advise the family of your advisors that should be contacted upon your death (attorney, cpa, executor, insurance agent and any other advisors). The letter could contain any other thoughts or advice you want to pass to your family.
Old North State Trust, LLC (ONST) periodically produces publications as a service to clients and friends. The information contained in these publications is intended to provide general information about issues related to trust, investment and estate related topics. Readers should be aware that the facts may vary depending upon individual circumstances. The information contained in these publications is intended solely for informational purposes, is proprietary to ONST and is not guaranteed to be accurate, complete or timely.
Susan Willett is the director of trust services and oversees all aspects of trust administration for Old North State Trust, LLC. Old North State Trust, a North Carolina chartered trust company, provides: asset management services; income, estate and trust tax consulting; retirement planning and administration; and trustee and estate services to both individuals and businesses. Old North State Trust professionals have many years of experience and for over a decade have assisted clients in identifying and reaching their financial goals. For more information, visit www.oldnorthstatetrust.com or call 910-399-5470.
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