Retirement is wonderful. After so many years of work, you’re finally going to be able to relax. But you also need to be careful not to make any serious mistakes in the home stretch. Here are some of the biggest mistakes that retirees make with their estate plans.
Not Updating Beneficiaries
Updating your last will and testament is just as important as making one in the first place.Your beneficiaries need to be updated. You also may need to update the details about how much of which assets go to who. Why? If you were to pass away unexpectedly before you were able to update it, it could cause problems.
It’s especially important to do so after big life events. For example, if you get a divorce and no longer wish to include your ex-spouse, you need to actively edit your will. Otherwise, nothing will change. Assets that are bequeathed to people who died before you will possibly end up in probate court.
Forgetting About Assets Outside a Trust
Assets within a trust have certain legal protections that come with them. This can include protection from debt collectors, as well as – most importantly – probate court. As you go about accumulating items of value in your life, don’t forget to update the trust as well!
And don’t forget about items that, for one reason or another, need to exist outside of the trust’s jurisdiction.Any property outside of a trust will be subject to probate court, and that is not a process that you will want to put your loved ones through. There is no guarantee they will be able to get anything you leave them if it goes to probate.
Not Using a Trust or Other Legal Equivalent
If you don’t currently have a trust operational – you may want to look into it. Again,certain protections are legally allowed to exist that will protect your assets from complications. It will help protect against litigation (always a good thing if you foresee disgruntled reactions to your bequeathing choices) and it will help your loved ones avoid probate court. They will also be unable to touch or use the assets in any way until the conditions of the trust are fulfilled.
You can never be too careful when it comes to estate planning. Making mistakes, after all, can end up being a huge inconvenience for your loved ones – and that’s the best-case scenario. Act now to make sure that the right steps have been taken long before potential problems crop up.
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