Many New York residents are prone to making mistakes when creating wills and other estate planning documents. Unfortunately, these mistakes can result in larger tax bills or family members being denied inheritances. One common mistake is not naming a contingent beneficiary on a retirement or insurance account. Failing to name a contingent beneficiary means that the asset will go directly to the estate itself. That could mean leaving it exposed to creditor claims or a probate court.
It is also a good idea to name multiple beneficiaries to an asset. This can prevent legal issues if the primary beneficiary also dies. If money is left directly to a minor, there should be clear limitations as to how the cash can be used. Otherwise, a parent or whoever is handling the money on behalf of the child or grandchild could use it in opposition to the deceased person’s wishes.
When creating an estate plan, it is a good idea to anticipate future events that could occur. For instance, there should be some contingency option available if an adult child were to get divorced or have credit issues. Those who have doubts about how assets will be handled can put them into a trust where they can be overseen by a trustee.
There are many strategies that individuals may use to reduce the chances of an estate plan problem. The use of a will or trust may provide more direction as to where assets go or how they are used. A special needs trust may help a person ensure that a child or grandchild is cared for properly. An attorney may assist in crafting estate plan documents or reviewing them as necessary.