Effective Estate Planning: Avoid these 3 Common Blunders

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Crafting an effective estate plan, especially when including a Trust, is an astute move. It’s a pathway to bypass probate, retain privacy, and seamlessly distribute your assets to your dear ones, potentially affording them a lifetime of asset protection. However, there’s a hidden snag: a mere creation of a Trust isn’t enough. Its strength lies in proper funding and timely updates. That is what effective estate planning provides.

Transferring your assets into your Trust’s name is crucial. This process, termed as “funding your Trust,” encompasses bank accounts, real estate, investments, and other valuable possessions. By doing so, you ensure your assets follow the directives of your Trust, ensuring distribution as per your wishes upon your demise or incapacitation.

But, an unfunded Trust resembles an empty vessel. It cannot protect or distribute your assets as intended. It forces your family into a costly legal battle to transfer your assets post-death. To avoid this, consult an attorney to prevent these potential pitfalls.

Effective Estate Planning Mistake 1: Overlooking Updates on Account Beneficiaries

You may think your Will or Trust alone decides the distribution of your financial accounts after your death. This is not the case. It’s the designated beneficiaries on your accounts that overrule any instructions in your Will or Trust. Keep your accounts under review, like bank accounts, retirement plans, and life insurance policies. Ensure your Trust is your designated beneficiary unless you have other plans for that account. Partner with a lawyer to keep your beneficiary designations updated on a regular basis.

Mistake 2: Neglecting to Include Your Home in Your Trust

For most, their home is a key asset. If your attorney fails to deed your home into your Trust, it won’t be governed by your Trust’s terms during incapacitation or death. The consequence? A long, expensive probate process to manage or transfer your home, costing your family significant sums. That’s why working with a dedicated lawyer who ensures every asset is in your Trust is crucial.

Mistake 3: Ignoring Periodic Review Every Three Years

Although neglecting to review your plan every few years won’t make it worthless, keeping financial assets up-to-date is paramount. Your Trust can’t manage assets that don’t list the Trust as the owner or beneficiary. By conducting reviews every 3 years, you can spot any accounts missing from your Trust. For instance, it’s common for clients to open a new bank account and forget to add their Trust as a beneficiary.

At Aisha Williams Law, we take a comprehensive approach to your estate planning. We don’t just create legal documents but develop a plan that incorporates all your assets and aligns them to work together. We offer a free review of your plans and financial accounts every three years to make sure they reflect your life and your wishes for your loved ones accurately.

Take your first step towards effective estate planning by scheduling a free 15-minute discovery call today. We’re excited to connect with you!

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This article is a service of the Law Office of Aisha M. Williams, APC, serving San Diego, Carlsbad, Escondido, and all of California. We don’t just draft documents. We ensure you make informed decisions about life and death for yourself and the people you love. That’s why we’ll start you with a  Family Wealth Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love.

We created this material solely for educational and informational purposes. It does not serve as ERISA, tax, legal, or investment advice. Should you need legal advice tailored to your specific needs, you must seek such services independently.