The start of a new year means different things to many people. For some in California it is a time to forge ahead with different goals, while others find it a time of peace and reflection. No matter how you ring in the start of another year, it is usually a good idea for people to carefully consider the contents of their estate plans and whether any updates to their wills are required. Failing to regularly update estate plans can cause considerable amounts of grief for loved ones.
When reviewing a will for possible areas of attention, many overlook beneficiary designations. A will might dictate that Person A should receive life insurance benefits in the event of the policy owner's death, but if the policy's designated beneficiary lists Person B, this trumps the will. This is the same for retirement plans and insurance policies that pay out to a beneficiary upon a person's death. Estate planners should be vigorous when updating their plans, and change any listed beneficiaries on their accounts as necessary.
It is also smart to reconsider the named executor, heirs and other beneficiaries of any given estate. Decisions made years ago might have been appropriate for the time, but no longer reflect current situations. A named executor might have once been a trusted friend that an individual has since had a falling out with, or an heir might have passed away. These issues can be fixed quickly enough, but if not, can cause serious issues during probate.
An annual review of estate plans is usually well-advised for most people in California. A thorough check of wills, trusts and other important documents can prevent wrong designations or incomplete documents from hampering estate plans and their creator's intentions. Otherwise, families might have to deal with the consequences during lengthy probate proceedings that can use up valuable resources.
Source: wmur.com, "Money Matters: Estate planning mistakes", Marc Hebert, Dec. 28, 2017