By, Shirley Farmer, Attorney at Law
The information provided in this article is intended to give a general overview of the topic and is not intended as legal advice. For information specific to your situation, please talk with your estate planning professional.
Article #13, Commonly Overlooked Issues In Estate Planning
In previous articles we have reviewed a variety of tools and issues for effective estate planning. While the big picture includes things such as choosing your Personal Representative, deciding how you want your estate to be divided when the time comes, and creating the basics (Will, Power of Attorney, Advance Directives for Health care), there are many important more finer points to consider as well. Let’s take a closer look at a few of the finer details that often go overlooked or neglected when making an estate plan:
The Follow Through – conflicting estate documents and account beneficiary designations. Once you have chosen who you wish to inherit from your estate when you are gone, make sure that you follow through with confirming the assets themselves have the proper beneficiary designation you want. For example, say you have two children and want them to each inherit equally. Over the years you have opened a few investment or retirement type accounts. Some of these accounts require you to complete paperwork designating a beneficiary specific for that account. Along the way one account has come to be worth twice as much as the other, but each only lists one of your children as the beneficiary for that account. When you pass away, the account beneficiary designated in the paperwork tied to that account will prevail. Just indicating in your Will that the proceeds from all accounts are to be divided equally between your two children will not overcome that beneficiary designation. Be sure to check your accounts and make sure any beneficiary designations are set up to achieve the division of assets you want. Remember: if you change your mind over time and want to change who will receive a certain asset, or if a designated beneficiary has passed away before you, you will want to update not only your Will but any beneficiary designation on individual accounts as well.
A somewhat similar example involves the primary checking account. Again in this scenario, say you have two children – one son and one daughter – and you want each to get half of the money in your bank accounts when you pass away. As the years go by, for convenience you’ve added your daughter to your checking account so she can help you manage your funds, write checks, and pay bills on time. If you have set the account up as a regular joint account with just your and your daughter’s name on it, when you pass away, the account becomes your daughter’s. It does not have to go through probate or potentially get processed with the rest of the estate, and it may short the share of your overall estate that your son gets depending on the balance of your assets and value of the account at the time.
Making your own final arrangements. Many people purchase their own burial plots or policies that will cover the final expenses and arrangements, such as cremation, to spare loves ones the stress and expense of having to make these decisions. Making such arrangements is all well and good, but how useful is it if your loved ones don’t know your wishes? If you have made specific arrangements or paid for services or a burial plot, make sure this information is included in your estate planning packet so that loved ones have access to the information when the time comes. Include the name and contact information of the establishment, as well as any policy numbers that may be necessary.
Designating specific personal items. When we leave this world, most people leave a lot of stuff behind. Everything from furniture and kitchenware, to clothing and photographs. If there are items that are particularly important to you, make sure you specifically address them in your estate plan so everyone knows your wishes. Many people don’t care much who gets the furniture, but other things, such as the family bible, Grandma’s wedding ring, and old family photographs, are much more important. If it is important to you that certain items go to certain people, put it in writing as part of your estate plan.
Who gets Fluffy? It is estimated that over 60% of households in the US have at least one pet. You’ve thought about your family and friends, but don’t forget to make arrangements for your beloved animal companions as well. Who will get the car is one thing, but who will take on the responsibility of a pet when you are gone is another consideration altogether. Choose wisely, and talk with the person you want to take care of your pet. Make sure the person you choose is willing and able to take on the responsibility, and specifically address this decision in writing in your estate plan.
Passwords and electronic accounts. As the world moves on and technology advances, more people than ever utilize this technology in their daily lives. When you are making your estate plan, remember to include a list of online accounts and what is to be done with them. This includes making sure someone knows if you use online banking or account management, and whether you have an email, Facebook, or other social media type account. Along with including a listing of what types of online accounts you have, it will be important to include the logins and passcodes to access these accounts to be able to properly shut them down when the time comes. For social media accounts, someone will need to have the login and passwords to be able to download any pictures from the site and potentially send a final message to those you are connected to in the site. For obvious reasons, information such as passcodes for online bank accounts is confidential, and you will not want to include copies of it with any documents that will be being available to just anyone. You will want to have this information secure, such as in a sealed envelope, with instruction in your estate plan of where to locate it when it is needed.
This is just a small sampling of the important details it can be easy to overlook when contemplating the big picture of an estate plan. That’s why it is important to talk with your estate planning professional to help you see the big picture as well as notice the fine details!