Avoid These Estate-Planning Mistakes

Issue: August - 2022

When many people hear thewords “estate planning,”they assume it’s just for thewealthy. But that’s not the case, becauseeveryone can benefit from an estate plan.And when you’re creating one, you’llwant to avoid some common mistakes.Before we look at those mistakes, let’sgo over what estate planning is designedto accomplish. Essentially, an estateplan allows you to pass on your assetsin the way you desire. But it can alsospecify other actions, such as namingsomeone to care for your minor childrenif you were no longer around. In creatingan estate plan, several key documentsare involved, including a will, a trust,a financial power of attorney and amedical power of attorney or a healthcare directive.Now, let’s consider a few estate-planningmistakes:• Not communicating your plans – You’llneed to inform your family aboutwhom you’ve chosen as executor – theindividual who will administer yourestate – and whom you’ve named as thetrustee – the person who will manageyour trust’s assets. (You can also choosea trust company to handle this duty.) Andto help avoid unpleasant surprises whenyour estate is being settled, consider let-ting your children or other close relativesknow who will be receiving what.• Not reviewing your plans periodically– Once you create your estate plans,don’t forget about them. Over time, yourpersonal situation may change – youmay experience a remarriage or bringin new children. Your interests maychange, too – perhaps you’ll becomedeeply involved in supporting a favoritecharitable organization. Given these andother potential changes, you’ll want toreview your estate plans once in a whileto see if they need to be modified. • Not updating beneficiary designa-tions – Every so often, you may want toreview the beneficiary designations onyour life insurance policies, investmentaccounts and retirement assets. Asmentioned, changes in your life, suchas remarriage and the addition of newchildren, may affect your beneficiaries.Beneficiary designations are powerfuland can even supersede your will, soyou’ll want to update them as needed.Also, if you have a 529 education savingsplan, you’ll want to name a successorowner – someone who can take overyour 529 if you were to pass away.• Not re-registering assets placed in atrust – A living trust offers you manypotential benefits, such as the ability tobypass the time-consuming and highlypublic process of probate when it’stime to settle your estate. However, justestablishing the trust, by itself, may beinsufficient – you likely also need to re-register assets, such as your investments,so they are officially owned by the trust,not by you. This is essential for the trustto work as you intended.Here’s one other mistake – not gettingthe help you need. Estate planning canbe complex, so you’ll want to workwith an attorney, and possibly withyour financial advisor and taxprofessional, too.By avoiding key mistakes and collabo-rating with a qualified team of profes-sionals, you can create and maintain anestate plan that will help you leave thelegacy you wish.

This article was written by Edward Jones for use by your local EdwardJones Financial Advisor.Edward Jones, Member SIPC