Like many other Americans, West Palm Beach readers may have made it a New Year's resolution to get serious about taking steps to ensure their families' financial security. According to Consumer Reports magazine, failing to update critical estate planning documents presents one of the top seven financial mistakes people should avoid in 2013.
Eighty-six percent of respondents to a survey conducted by the magazine reported that they had not updated their wills or other estate planning documents in five years or more. Even if no major changes have taken place in a person's life it still remains worthwhile to have an experienced estate planning attorney review the document at least once every five years or so. Probate law and rules affecting tax liabilities change frequently and a regular review can help ensure that estate planning documents keep up with new opportunities and legal requirements.
Estate plans that incorporate trusts should be reviewed even more frequently. Many varieties of trusts are designed specifically to maximize benefits built into the federal tax code. The operation and effectiveness of different types of trusts depends not only upon changes in state and federal tax codes, but also upon individual case decisions that define how ambiguities in the law will be interpreted and applied.
Of greatest importance, however, may be an annual review of beneficiary designations in financial accounts. Insurance policies, retirement accounts and other investment vehicles should be reviewed at least once each year to make sure that contact information and beneficiary designations are accurate and up to date.
A bit of individual effort can go a long way toward helping avoid unpleasant, or even disastrous, financial surprises. Most Floridians will be able to review their beneficiary designations without assistance, but it may be a good idea to let an estate planning attorney periodically review instruments like wills and trusts.
Source: KWCH-TV, "Consumer Reports: Avoiding financial disaster in 2013," Jan. 2, 2013