Creating a will and other estate planning documents is only the first step in the estate planning process. Testators also need to routinely review and update their paperwork to ensure it provides adequate protection. Many people understand that they need to reread their wills and other documents to check them for outdated terms. A review every few years or after major life events is generally a smart decision.
Unfortunately, many people who have engaged in asset protection planning strategies and those with life insurance policies may sometimes overlook critical documents when updating wills and other paperwork.
What do people forget to update?
Any documents not directly created or stored by an estate planning attorney are easy for people to forget when they review and revise their estate plans. People with life insurance policies may forget to update their beneficiary designations after a divorce or the death of a family member. They may then have outdated paperwork that could lead to major probate complications after they pass.
Transfer-on-death designations are another important consideration. People with bank accounts, retirement funds and investment holdings may submit paperwork to their financial institutions that allows a specific person to assume ownership of their accounts after they pass.
Changes to relationships and family dynamics may make it necessary to update those designations. The loss of a loved one could also make it necessary to update the paperwork filed with financial institutions and insurance companies.
Keeping estate planning paperwork up to date helps people optimize their personal protection, as well as the protection of their assets and family members. Accurate documents help to ensure that the right people receive insurance proceeds or access to financial resources.