Estate planning is an integral part of any responsible financial plan. Whether you have amassed a huge personal net worth or simply have some money in a savings account, the responsible thing to do is create an estate plan that distributes those assets among your heirs. North Carolina residents should avoid some common mistakes that people make when creating their estate plan.
Making a minor a beneficiary
Many people want to leave financial assets to their young children or grandchildren. While this move certainly comes from a place of love, it can have negative consequences if those beneficiaries are still minors when you die. Most states don’t let minors receive access to an inheritance until they are 18 while others require them to be 21.
To circumvent these rules, you should choose a guardian to handle those funds until the child reaches the legal age. This ensures that the courts don’t name a guardian who may not fulfill your wishes.
Failure to fund the trust
Leaving your assets in a trust is a great way to ensure that they go where you want them to go after your death. However, it is vital that you take the time to formally put the assets in question into that trust. This is referred to as funding the trust.
Failure to properly designate beneficiaries
If you fail to assign a beneficiary to every asset in your estate plan, you can cause the process to drag out for months or even years. Make sure that you have beneficiaries listed for any asset in your estate plan in order to keep your estate from going through the probate process.
Working with an attorney who is well-versed in estate law may help ensure that you avoid these estate planning pitfalls. This attorney may review your assets and help you go through each step of the process.