We never want to imagine the worst. That’s why so many people neglect to regularly engage in the estate-planning process to adequately protect their assets after they’re gone.
For that reason, I thought it would be beneficial to outline some of the most overlooked, but important estate-planning details that can make all the difference. There’s never a better time to update your estate plan than now!
1. Name your own power of attorney, advance health care directives and confidential medical information release forms, even if you’re a young adult.
This one is especially important in case you should become incapacitated. Yes, it’s less likely if you’re a young person, but accidents can happen to anyone of any age, so it’s better to be protected than sorry. If you don’t have all the above things in place and do happen to become incapacitated, your family will not be able to act on your behalf without a costly court intervention.
2. Don’t forget about pets.
If your pet is important to you, then don’t forget to include it in your estate plan. You’ll want to authorize a specific person to pay for your pet’s care and veterinary expenses if you are unable to do so. You can also include instructions of where you would like your pet to be placed once you’re gone, whether it’s with another individual or in a no-kill shelter. Believe it or not, there is also such a thing as a pet trust, in which you can leave funds for the ongoing care of your pet with its new owner.
3. Make sure inheritances of minor children are held in trusts.
If this isn’t done, then a court appointed guardian is needed to manage the minor’s inherited accounts and properties should you die or become incapacitated. If these assets are held within a trust, however, minors can still receive financial support through an appointed power of attorney accessing that account on their behalf.
4. If you name your child to settle your estate, make sure he or she is qualified for the task.
Ask yourself a series of questions to evaluate this one, such as “What kind of relationship does my child have with his or her other siblings?” If their relationships are negative, that could really impact their ability to adequately and fairly settle your estate. If you have any questions or reservations about whether a certain child would be able to act properly in such a role, then maybe it’s time to reconsider your decision to put him or her in charge.
5. Update your will after getting married.
If you fail to do so, the law presumes the new spouse to be an inadvertently omitted spouse. In this case, the omitted spouse is entitled to claim a share of the decedent’s estate (usually one third to one half). By updating your will to include your spouse, you can make exact specifications about what you would like them to inherit instead of a court making such decisions.
6. Name alternative death beneficiaries to inherit your assets in case the primary beneficiary is deceased.
Last, but certainly not least, this is an often overlooked but very important estate-planning contingency. With life insurance, annuities and retirement plans, naming an alternative death beneficiary means properly completing a designation of death beneficiary form. This important piece of information will control who inherits such non-probate assets. If you fail to do so and your primary beneficiary is deceased, then certain assets may trigger a costly probate process for your living family members and/or cause assets to be passed to unintended heirs.
The bottom line: It’s very important to regularly review your estate plan to ensure you’re not overlooking any of the above important details. A trusted financial professional can help you walk through the steps to properly protect and update your estate plan so that all of your wishes will be carried out once you’re gone or unable to make necessary decisions.