It’s been said that the devil is in the details, and it is often the overlooked details in estate plans that can bedevil estate executors and loved ones. Here are 7 of the most common items that are often overlooked when it comes to estate planning:
1. Incomplete asset list. One of the ways an estate administrator’s job can be made more difficult is when there is an incomplete list of estate assets. Trying to locate all the assets in an estate can cost extra time and money, so be sure you have a complete list of your assets accounted for in your estate plan.
2. No cash to administer the estate. While an estate is being settled, there will be a need for cash to pay some expenses and for a surviving spouse to live on. If there is not adequate liquidity in the estate, some assets may need to be sold, which can reduce an inheritance for heirs.
3. Taxes not considered. Even if the estate will not be subject to estate taxes, if there are assets that earn income, these will be taxed and should be planned for.
4. Asset valuation. If there is a collection or other type of hard-to-value asset in the estate, the owner should leave written instructions for an executor on how the asset values have been determined.
5. Designated beneficiaries. An estate owner should leave a comprehensive list of all financial accounts or life insurance policies that carry beneficiary designations. Include the account information, custodian institution and who is named as beneficiary of each account with copies of the beneficiary forms included.
6. List of creditors. Before inheritances are distributed, creditors must be paid, so a list of creditors should be included with your estate plan so your executor can verify claims.
7. Accounting for gifts. If you have provided family members with a loan or a gift, be sure to specify in your estate plan whether or not the loan or gift is to be offset with an unequal distribution or forgiven.
To ensure that you don’t overlook some of these common issues in your estate plan, contact our Orange County law firm.