In life and even in death, many parents take steps to ensure that their children will have better or more than they did. But despite the honor in an Idaho parent's intentions, there are costly pitfalls associated with estate planning that can be avoided with proper guidance.
According to Lane V. Erikson, an Idaho Estate Planning Attorney of 20 years with Racine Olson, estate planning is more involved and complicated than simply leaving your children your assets. Below are the three biggest and most common estate planning errors Erikson encounters.
Non-Estate Assets in an Estate
Life insurance and things like retirement accounts, 401ks, annuities, and pensions are considered non-estate assets. These non-estate assets are dictated by outside contracts, making them somewhat of a wild card after a parent's passing.
Regarding these entities, it's best to fill out beneficiary forms that prevent them from becoming entangled in the estate through probate, "the legally enforceable written declaration of a person's intended distribution of property after death."
In Erikson's experience, failure to fund a trust happens quite often in the Gem State.
Many Idahoans create trusts to avoid probate but forget to put anything into them! In order for a trust to be effective and protect the assets intended for their children and loved ones, the trust must "house" their money or other assets. Unfunded trusts are useless and prevent loved ones from engaging with your estate until after your passing.
Keeping Your Estate Plan Current
Keeping your estate plan current is an extra step in ensuring the proper distribution of your assets. Forgetting to note significant life changes such as a births, deaths, marriages, divorces, relocation, etc., is a mistake you want to avoid.
I have personally seen clients go through a good deal of heartache because a loved one did not update their estate planning. Often this means that people who are no longer part of a family may still be listed as beneficiaries who will receive a part of the estate.
In short, this means someone you no longer want listed as a personal representative/trustee can make unilateral decisions that can "create hardship and heartache" for your family included in your Idaho estate. Remember, when estate-planning and trying navigate probate terms, it's always best to work with an actual estate planning attorney.