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Every adult, especially a parent, should have a Will or trust.  However, that is not the end of your estate plan.  Even if you have a Will or trust, other decisions you make can still undermine that plan.

Take the example of a widowed parent who wants to divide her assets equally among her children. Of course, she should have a Will or a trust drafted to reflect her wishes.  But if she also adds only one of the children to her financial accounts, as innocuous as this move seems, she has potentially jeopardized her estate plan.

That child now arguably “owns” those accounts as well.  Money can be withdrawn or “borrowed” from that account by the child.  Upon the parent’s passing, that child may “forget” that money was to be shared among all the children.  Even if that child is honorable, the funds in those accounts are exposed to the creditors and predators of the child. 

Parents can also undermine their estate plan by the way they identify beneficiaries to their retirement plans (such as IRAs), insurance policies and annuities.   That money will go to designated beneficiaries, regardless of what is stated in the Will or trust.  More than once have I seen a parent list only one of the children as the beneficiary of a large IRA.  The parent listed that child thinking the child would be like the “executor” for their will and distribute the money among all the kids.  But under the law, that child has no obligation to distribute that money to anyone else. 

These types of well-intended decisions sacrifice the protections provided by proper estate planning because they result in the unintended transfer of assets, relinquished control, and increased risk.  No matter how carefully a Will or trust is drafted, a lapse in judgment or a step taken for the sake of convenience may create results you never intended.

There are simple ways the same goals can be accomplished but without the risk.  Come to a free, no obligation presentation to find out how to protect your estate.