During our current crazy economic environment, estate planning has increasingly become a hot topic. However, even after one completes their estate plan, there still may be post-estate planning pitfalls that Virginians face.

Inappropriate investment strategies

Estate planning is not just about after one dies. One must think about whether their investment and retirement planning meets their current needs and whether those same strategies will meet their beneficiary’s needs after one passes.

For example, while cash and bonds may be safe investments that are easily transferred after death, they are not smart ways to build wealth to retire. After all, there investment returns are often similar to or less than the standard rate of inflation.

Conversely, complicated and volatile investments, like crypto currencies and penny stocks, can be hard to predict and complicated. This can mean that if one is trying to apportion an estate equally, if one heir is receiving a volatile investment, they may receive much less or more than other heirs. In addition, a complicated investment may require an heir to hire a financial expert, which will incur additional costs.

Failing to update documents to match a will

Many Richmond residents think that whatever they write into a will is essentially the law of how their assets will be distributed after death. Unfortunately, this is not always the case.

For assets that are supposed to be in a trust, ownership of those assets must be transferred into that trust. If one forgets to update title to effectuate the transfer of an asset into the trust, that asset is not part of the trust.

Similarly, for those financial assets that have designated beneficiaries or joint account holders, like retirement and bank accounts, if one does not ensure those designated beneficiaries match what is in the will, an unintended beneficiary may receive those assets. This is most common with divorced couples when one spouse forgets to take their ex-spouse off of their retirement account or life insurance.

This is why it is so important to meet with an attorney directly to craft an individualized estate plan. While one can get a will off the internet, it is no substitute for a learned hand.