There are many people in Texas and elsewhere who think that just creating a will is the only necessary step in estate planning. Though it is an important one, experts say that there are many aspects that people overlook throughout the process. One of the areas people tend to neglect is ensuring that beneficiaries are up to date. Experts say there are several common mistakes that people make in relation to beneficiaries in estate planning.
The first, and possibly most obvious, is the failure to name a beneficiary for every account that a person owns. Failing to do so means that one’s estate will be the beneficiary. Though that may sound acceptable, the estate will go into the probate process and may result in a beneficiary not being able to take advantage of normal tax laws that surround retirement accounts.
Another common mistake is neglecting to name a contingent beneficiary. Doing so is necessary in case the primary beneficiary dies before the estate holder does. In some cases, a primary beneficiary may not wish to claim an estate, perhaps because he or she doesn’t want or need it, or because doing so would not be advantageous from a taxation standpoint.
Some people may think that simply designating that an estate be left to one’s “children” or “spouse” is enough, but experts say that using specific names in documentation is essential. Not specifying particular people may mean that stepchildren are left out of a will. It could also mean that an estranged relative could attempt to claim a portion of the estate.
In any scenario, communication is essential to estate planning. This will ensure that one’s wishes are known to family or other people that an estate holder values. Also, the selection of beneficiaries should be reviewed periodically. Anyone here in Texas who wants to create an estate plan or update his or her beneficiaries may find the advisement of an attorney to be valuable. It can offer peace of mind that loved ones will be cared for no matter how life unfolds.