Last, but not least, this is the third part of our “important estate planning questions” series. An essential part of the estate planning process is getting your questions answered and your concerns addressed. Below you will find answers to many of your estate planning questions, but you are likely to have additional questions as well. Be sure to consult with a qualified estate planning attorney.
What mistakes do people make when doing their estate planning?
Common mistakes include:
- Not disclosing all assets to the estate planning attorney
- Not disclosing health problems or family issues to the attorney
- Not updating the estate plan every three to five years or upon the occurrence of a significant event
- Not reviewing beneficiary designations every three to five years or upon the occurrence of a significant event
- Not planning at all
I’m divorced but have a great relationship with my ex-spouse; do I need to update my estate plan?
Absolutely. Even if you want to keep your ex-spouse as your beneficiary and your trusted agent (i.e. trustee, executor, power of attorney agent), you need to update your documents, reflecting your acknowledgment of the change in marital status.
Many documents automatically disinherit an ex-spouse, and your ex-spouse may be automatically disinherited under state law. And, if it looks like you failed to update, a will contest could ensue.
I’m single. Do I need life insurance?
It depends. Do you have enough life insurance to cover your debts as well as your last expenses? Is there anyone who is financially dependent upon you such as a minor child or elderly parent? Do you want to create an estate? Do you want to equalize an estate for children not in your family business? Do you need insurance to fund a buy–sell agreement? Do you want to leave a charitable gift? Chat with your estate planning attorney to get a better feel for your insurance needs.