Residents of Texas may be aware that, as the year comes to an end, it can be a good time to consider a review of an existing estate plan. In addition, those who have made directives as to the beneficiaries of their assets may wish to review those designations. This is just one of the many reviews recommended to be completed annually by people here in our state and across the nation who have begun estate planning.
The designation of a beneficiary takes place at many points of a person's life. This includes IRA accounts, retirement and insurance plans and when opening a bank account. Some of these designations may become outdated when major life changes occur for people here in Texas.
For example, when the death of a beneficiary occurs, and a secondary one has not been appointed, the money could got through the probate process. In another situation, a divorce can change the desire for an ex-spouse to receive funds at the time of death of the person who made the appointment of a beneficiary. However, if a change is not made to estate planning documents, the designation could override a will and allow the "wrong" people to receive funds.
Estate planning has many aspects that can appear complicated to people in Texas. Because of this -- and for the potential that the wrong people would be subject to an inheritance -- it is often a good idea for a person to review not only their existing documents but also any life changes that may have led to the need to make changes to estate planning documents. These efforts can pay off when the intended people of the person creating the plan are the ones who inherit assets.
Source: Forbes, The Big Estate-Planning Goof You May Be Making, No author, Dec. 16, 2013