If you’re taking your first steps on your estate planning journey, congratulations! While thinking about one’s mortality is never pleasant, having a plan in place can provide peace of mind for you and your loved ones in case of unexpected incapacitation or death. Here are five estate planning pitfalls you’ll want to watch out for:

Five Estate Planning Pitfalls

Pitfall #1: Not Coordinating Different Plan Aspects

Typically, there are several moving parts to an estate plan, including a will, a power of attorney, trusts, retirement plan accounts, and life insurance policies. Don’t look at each one in a vacuum. Even though they have different objectives, consider them to be components that should be coordinated within your overall plan. For instance, you may want to arrange to take distributions from investments — including securities, qualified retirement plans, and traditional and Roth IRAs — in a way that preserves more wealth.

Pitfall #2: Failing To Update Beneficiary Forms

Your will spells out who gets what, where, when, and how, but it’s often superseded by other documents such as beneficiary forms for retirement plans, annuities, life insurance policies, and other accounts. Therefore, like your will, you must also keep these forms up to date. For example, despite your intentions, retirement plan assets could go to a sibling or parent — or even worse, an ex-spouse — instead of your children or grandchildren. Review beneficiary forms periodically and make any necessary adjustments.

Pitfall #3: Not Properly Funding Trusts

Frequently, an estate plan will include one or more trusts, including a revocable living trust. The main benefit of a living trust is that assets transferred to the trust don’t have to be probated, which will expose them to public inspection and subject them to delays. It’s generally recommended that such a trust be used only as a complement to a will, not as a replacement.

However, the trust must be funded with assets, meaning that legal ownership of the assets must be transferred to the trust. For example, if real estate is being transferred, the deed must be changed to reflect this. If you’re transferring securities or bank accounts, you should follow the directions provided by the financial institutions. Otherwise, the assets must be probated.

Pitfall #4: Mistitling Assets

Both inside and outside of trusts, the manner in which you own assets can make a big difference. For instance, if you own property as joint tenants with rights of survivorship, the assets will go directly to the other named person, such as your spouse, on your death.

Not only is titling assets critical, but you should also review these designations periodically. Major changes in your personal circumstances or the prevailing laws could dictate a change in the ownership method.

Pitfall #5: Not Reviewing Your Plan On A Regular Basis

It’s critical to consider an estate plan as a “living” entity that must be nourished and sustained. Don’t allow it to gather dust in a safe deposit box or file cabinet. Consider the impact of major life events such as births, deaths, marriages, divorces, and job changes or relocations, just to name a few.

To help ensure that your estate plan succeeds at reaching your goals and avoids these pitfalls, contact us. We can help ensure that you’ve covered all the estate planning bases.