Friday, February 1, 2013
There are many different steps in the estate planning process, but too often these five areas in the estate planning arena are overlooked. Clients will be thankful if advisors take the time to address these five estate planning pitfalls.
- Make sure legal documents are accessible
- Request beneficiary designation forms
- Have your client evaluate the beneficiaries circumstances
- Clients owning a business should formulate a succession plan
- Clients need to take the time to review and update their estate plan
First, an attorney can be delayed in fulfilling a client’s wishes because he lacks access to important legal documents. Therefore, a client might want to keep important documents in places that are accessible to those who need them to prevent this delay. Not keeping documents accessible can cost heirs both time and money. Second, attorneys might want to evaluate assets outside of the estate. An attorney might consider requesting and updating their client's beneficiary designation forms . Not doing so can cause problems because a beneficiary form is honored regardless of the date. Third, clients might want to consider the beneficiaries' circumstances to make sure that their needs are met. For example, a beneficiary with financial problems would benefit from a spendthrift clause. Arranging to accommodate beneficiaries in advance can prevent future drama. Fourth, if your client owns a business, a well formulated succession plan can avoid disasters and save his business. Most importantly, regardless of a client's busy schedule he or she might want to make time to review and update his estate plan frequently to make sure it's current.
See Erik Hartstrom, 5 Estate Planning Black Holes, Life Health Pro, Jan. 31, 2013.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.