In the grand scheme of financial planning, creating an estate plan is hardly at the top of the list. It can be difficult to consider what might happen to your assets once you pass, and often when people are in the prime of their lives, determining end-of-life decisions is just not on their radar. However, the hard fact of the matter is, none of us knows what tomorrow holds. Having a say in where your financial investments go can be comforting and often gives people a great sense of peace when they are in the midst of trials.
Setting up an estate plan is not always a simple procedure, however, some people think that they can save a few bucks and just do it themselves. While they might think that they have everything in place, there are many considerations that people who are not familiar with the intricacies of estate planning just don’t take the time to think about.
Consider an individual who goes through the process of setting up their own trust only to find out after the death of their spouse that the titling was not set up correctly and the funds will not distribute as they had planned. One thing that can be missed is the scenario of a trust vs. life insurance or will designation – the plain fact of the matter is, a will, trust or any other legal document will not supersede the beneficiary designation form from a life insurance policy.
Additionally, it is important to remember that while it is important to have a will, this document is not enough. For example, if an individual has recently remarried and names his new wife as sole heir in the will, yet he forgets to remove his ex-wife’s name as beneficiary in the life insurance policy, the ex-wife will receive the funds from the policy and not the new wife if this is not changed before his death.
Creating an estate plan that remains consistent with your wishes throughout your lifetime can be a complicated task that is best left to the experts. We recommend discussing your plans with a qualified fee-only financial planner and a trusted attorney specializing in estate plans.