Everyone should have at least a basic estate plan on file. But it's important to do it right, as mistakes can occur. Below are some of the most frequent mistakes that are made in estate planning.
Procrastination. Not having your own plan in place means that the Commonwealth of Pennsylvania steps in and takes over. In these cases, the laws of intestacy govern who gets your assets and how they are acquired.
Unfinished/obsolete documents. Suppose you made out your estate plan at 35 when you were married with children. Now, you're pushing 70, been divorced and got remarried. Your kids are grown and there are now grandchildren. The brother you selected as executor passed away three years ago. You need a revision.
It's also important to note that estate tax laws are currently in flux, and any changes may affect your heirs and beneficiaries. It's a good idea to consult with financial and legal professionals who can guide you in the right direction.
Another thing to keep in mind is that beneficiary designations trump whatever is in your will. That means if you have assets that are co-owned in joint tenancy with rights of survivorship (JTWROS) with an ex-spouse but listed your current spouse and the heir in a will, your ex gets the property or cash. The same is true with the beneficiaries on any life insurance policies or retirement benefits.
These are but a few of some very common mistakes people make when they do their estate planning. It's always good to periodically review your estate plan and update it whenever major life changes occur, e.g., divorces, death, remarriages, births.
Source: WMUR, "Money Matters: Estate planning mistakes," Marc Hebert, Dec. 28, 2017