In Tennessee, residents are frequently advised about the importance of having an estate plan. Recent events across the nation and all over the world have emphasized this. It is smart to expect the unexpected and prepare. Even a basic will can help to avoid challenges and disputes after a person has died. For more complex situations, there are useful alternatives like trusts, powers of attorney, advance care directives, conservatorships and more. A refrain about estate planning is that missing small details can cause major problems later. One of the fundamental aspects of an estate plan is designating beneficiaries. Mistakes can be problematic and should be avoided if possible. Having guidance can help to prevent this.
Naming the right beneficiaries is imperative
Despite a growing appreciation for the value of having an estate plan, people still make mistakes when naming beneficiaries. Not only could this leave assets to a person the testator did not intend to leave them to, but it can result in tax problems. For example, a person might have gotten divorced since they created their estate plan. In some instances, the testator will still want to leave certain properties to the former spouse. In others, they do not. The document must be studied and changed to reflect the new desires.
Retirement accounts and insurance policies are also frequent terrain for missteps. Even if a will was altered to account for new circumstances, many might not realize that the retirement accounts and insurance policies are not subject to the estate plan. Therefore, whoever is named as the beneficiary on these documents will get the proceeds. That includes a Roth IRA, inter-vivos trusts and other assets that are not subject to probate. Taxes and helping loved ones avoid a hefty bill after the testator dies is a source of worry. Knowing about options like health savings accounts (HSAs) can be useful.
Creating and updating an estate plan may require experienced assistance
Despite the best intentions when creating an estate plan, the reality of everyday life may make it obsolete relatively quickly. That means it is a wise step to periodically asses the document and update it as needed. At any point in the estate planning process, having professional advice is beneficial. Consulting with experienced professionals can tailor the document accordingly.