Life Insurance Mistakes Could Damage An Estate Plan
A lot of people equate estate planning with wills. It is true that wills can be a significant part of an estate plan. It is also true that whether a person has a will and what terms their will contains can have very big impacts on what happens after they pass away.
However, estate planning is not solely about wills, and matters related to wills are far from the only important estate planning issues that can come up for a person. For one, life insurance can be a key part of a person’s plans for what will happen after they die.
As with wills, when a person makes mistakes when it comes to life insurance, it could have some very significant implications on their overall estate plan and how able that plan will be to do what it is supposed to. Some examples of mistakes a person could make in connection to life insurance include:
- Not checking one’s medical records to make sure they are accurate prior to applying for life insurance.
- Not having the right life insurance plan for one’s situation.
- Failing to give careful thought to who to name as a beneficiary in a life insurance plan.
- Not updating beneficiary designations after a major change in one’s family.
- Not having backup beneficiaries.
- Not being fully aware of the potential tax implications of different life-insurance-related actions.
So, it can be very important for a person to not ignore life-insurance-related issues when it comes to their estate planning. Experienced attorneys can advise individuals on how matters related to wills, life insurance and other key issues could impact their overall estate plan, and how to avoid mistakes in relation to these matters.
Source: CNBC, “3 life insurance mistakes you can easily avoid,” Kelli B. Grant, Sept. 16, 2016