Estate plans do not always work as intended. There can be many different reasons, such as relatives fighting over an estate. However, sometimes estate plans do not work for reasons that should be easy to avoid.
The basic problem? People do not think about changing their estate plans when they probably should, as was recently discussed by Wicked Local Dedham in “Five things that can derail your estate plan.”
Typical problems include:
- The law has a lot to say about spousal inheritances. In most states, if there is no other legal agreement between spouses, a surviving spouse gets half of the deceased spouse’s estate. If spouses divorce, the ex-spouse is automatically written out of a will. A change in marital status can, therefore, make a current estate plan useless.
- If someone who was supposed to inherit a large portion of your estate passes away, it will have an impact on your current estate plan.
- If an heir or beneficiary develops problems, your current plan may not distribute the inheritance as you would have intended.
- You can get a trust but if you do not fund the plan, it will not work as you intended. It might not even work at all.
- If you move to another state, your old estate plan might not be as effective because of a difference in the laws between the two states.
Reference: Wicked Local Dedham (April 15, 2018) “Five things that can derail your estate plan.”