The image of a dusty will being pulled from a dresser drawer that had been its home for several decades might be good for a movie, but it isn’t good when it comes to actually probating that will. The truth is that the best estate plans are as organic as our lives are, because a lot happens during our lives.
The life we had in our 20s is certainly different than the one that we have in our 70s. In that time we might change jobs, move, have kids, make investments, start a business, experience the joy of becoming a grandparent or even experience the loss of a friend. As our lives change, our estate plans need to be able to keep up, because failing to do so could mean unintended consequences during the probate process in Las Vegas.
A major part of making sure our estate plans do what we want them to do after we’re gone is keeping our beneficiary designations up to date. There are a lot of assets that can be transferred outside of the probate process. This could include life insurance policies, mutual funds, bank accounts, brokerage accounts, annuities and 529 college savings plans and more.
A common beneficiary designation for life insurance is a spouse. What happens if you get divorced but forget to update the policy designation? The payout could go to your ex-spouse despite what your will says.
What if the beneficiary has passed away? The assets could go back into the probate estate. A contingency beneficiary might be a good preventative measure in this case.
What about taxes? In some cases, we can make an heir’s life easier, maximizing their inheritance when we maximize the benefits of making certain designations.
Of course, the answers to these questions aren’t even the same in every jurisdiction, which is why any beneficiary change or estate plan alteration should be made with the consultation of an attorney.
Source: The Wall Street Journal, “Don’t make the No. 1 estate-planning goof,” Harper Willis, Jan. 23, 2014