Orange County California
Trust Attorneys

Call us: (714) 459-5481
Select Page

After reviewing your existing plan, you realize that you have not properly addressed your insurance or retirement assets. These assets are somewhat unique with regard to the tax laws that impact them. Fortunately, it is not too late to fix this mistake. An update to your estate plan can modify your documents to incorporate these valuable assets in a manner that benefits your beneficiaries and minimizes any tax burdens.

Ten Considerations to Fix Estate Planning Mistakes With Life Insurance and Retirement Assets

Mistakes relating to insurance, pensions, 401(k)’s, IRA’s, and other retirement assets can have significant tax implications on your estate and your beneficiaries. Updating your estate plan can resolve these issues to ensure that your plan properly addresses these unique assets. As part of your modification, it is important to take the following actions:

  1. Review the existing beneficiary designations.
  2. Review the terms of your life insurance policies to determine whether they are term, whole life, or other forms of policies.
  3. Review the types of accounts that you have to determine whether they are transfer-on-death or payable-on-death accounts.
  4. Review the terms of your living trust to determine whether it is compatible with your life insurance and retirement accounts.
  5. Assess whether or not naming a trust as a beneficiary of any of these accounts may have negative tax consequences.
  6. Determine whether your beneficiaries should receive the asset over a period of years rather than outright at the time of your death.
  7. Determine whether your minor beneficiaries are named as outright beneficiaries.
  8. Assess whether your existing plan allows for sufficient liquidity after your death. This liquidity is important to allow your loved ones to pay expenses such as funeral costs.
  9. Review your life insurance and retirement assets to ensure that any former spouses are no longer listed as beneficiaries.
  10. Consider whether separate trusts should be created to hold any of the assets.

Did this article help you understand the considerations that are important when addressing mistakes in your estate plan? If so, we encourage you to share it with your friends and family on Facebook. This information may help your loved ones uncover mistakes in their own plans before it is too late.

Pin It on Pinterest