Thursday, February 08, 2007

Don't Disinherit Your Heirs By Mistake

Did you mean to disinherit your newly born child? Probably not. But to avoid mistakenly omitting a loved one from your estate it is most important to understand that your will only controls a fraction of what you own.

Many assets will likely pass outside of your will, including assets that are owned jointly (with rights of survivorship), assets held in a trust, and those which have controlling beneficiary designations, such as retirement accounts or life insurance. It is becoming more common for these assets to be the most valuable items in an estate. That makes it more important then ever to make sure that your beneficiary designations are current and consistent with your overall plan.

A recent Newsweek article highlights this important topic:
Your will tells the family how you want your property distributed when you die. But here's something you might not know: your will—and your wishes—can be overridden by other forms you've signed and forgotten about. Take the beneficiary form that came with your life-insurance policy. If it names your two children as beneficiaries and later a third child is born, only the first two will get the money. To include the third, you'll have to change the form.
The article discusses many other pitfalls that can affect you and your heirs in the event that your estate plan is incomplete or out of date. As an attorney who has worked with clients who have been the unfortunate victim of this scenario, I can confirm that this is a very real problem.

The best way to avoid family conflict and to make sure that your heirs are properly taken care of, make sure to not only work with an estate planning attorney to prepare your plan, but also to periodically work with your attorney to make sure that all of your assets will pass according to that plan. That is the best way to make sure that where you have a “will”, you also provide the way.

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