There are some common mistakes when it comes to estate planning that you should be aware of. One common mistake has to do with not including important elements, such as a will, in your estate plan. Even if that is in place, however, most people forget to review or modify their estate plan when they should.
Keep reading for more information on situations that should cause you to modify your estate plan.
Your retirement plan is not updated
According to an article on Forbes.com, people often go for a decade or more without reviewing the beneficiaries on their retirement plans. This can cause problems because retirement plans will follow distribution preferences per the forms associated with the retirement plan, even if the beneficiary on your trust or will is different. This is one of the reasons that it is important to review your estate at least once every three years. A lot can change in a decade and without frequent review, the wrong people could benefit from your retirement plan.
A change occurs in your assets or liabilities
Any significant change to your assets or liabilities should cause you to review your estate plan. For example, if you sell a property that you own, you should remove it from your estate. Conversely, you may want to add any properties that you buy. Additionally, many business owners forget to adjust their estate plans when they buy or sell a business.
You move to a different state
Laws regarding estate plans vary from state to state. If you move across state lines, it is important to update your estate documents so that they comply with the state you reside in.