DIY estate planning mistakes can cause serious issues
March 4, 2019
Family dynamics differ for everyone. Some people may have close, loving relatives that they enjoy spending time with, and others may have difficult family relationships that lead to estrangement or conflict. In either case, it is important for individuals to go through the estate planning process to ensure that the people they want to receive assets or that they do not want to receive assets are aptly addressed.
In particular, it is important for California residents and those elsewhere to ensure that they have properly designated beneficiaries for their assets and have created a proper will or trust. A recent report gave one example of a situation in which a man had wanted to disinherit his daughter because they had been estranged; instead, he wanted to leave the entirety of his estate to his partner, who he never married. However, he had apparently forgotten to update his beneficiary designations. As a result, the daughter still received the man’s retirement account after his passing because she was still appointed as beneficiary.
Additionally, his will was not properly signed and appeared to be of the DIY variety. Unfortunately, the will created further complications, including having an inheritance tax clause that left the estate responsible for paying taxes on the man’s retirement account. In the end, the man’s estranged daughter ended up with his retirement account, and his partner was left without the funds and with the responsibility of paying taxes on it.
Unfortunately, estate planning mistakes are not uncommon, and when individuals try to create important documents on their own, there is an even greater margin for error. As this case shows, mistakes could result in assets landing in undesired hands and loved ones being left without needed inheritances. In efforts to avoid such troubling mistakes, California residents may want to create their estate plans with the help of experienced attorneys.