Are you a senior adult who loves do-it-yourself projects? Does contacting a Connecticut estate planning attorney and meeting with him or her just seem like too much to do? Do you, therefore, decide that doing your own estate plan may be the best idea? After all, is it not better to DIY an estate plan than to not have an estate plan at all? Not necessarily. If you decide to write your own estate plan without seeking counsel from a qualified Connecticut estate planning attorney, you, and your estate when you pass away, could run into a lot of issues later.
When you pass away, if your DIY estate plan is unclear or written against legal statutes your beneficiaries could end up in probate court with a judge making decisions on what happens to your estate. Furthermore, your beneficiaries may have to follow what you wrote even if the end result is unfair and not what you intended. Beneficiary designations can be a very difficult issue to understand without the advice of an estate planning attorney.
Therefore, we would like to present three reasons why your DIY estate plan may backfire because of your beneficiary designations.
1. Rules About Beneficiary Designations Are Not Understood. Not knowing or understanding that the rules on beneficiary designations always govern what happens to your estate is one of the biggest reasons why a DIY estate plan may backfire. For example, when you open a bank account, a brokerage account, or a retirement plan, you will be asked to designate one or more beneficiaries. Now, you understand that whoever you write down in that beneficiary box is the person (or persons) who will receive the remainder of the account when you pass away. Here is the catch, it does not matter if you write a different name or names in your will or estate plan. Whatever is written on the beneficiary designation form for any account is what will happen. If you create your estate plan with a qualified Connecticut estate planning attorney your beneficiaries will not have these problems
2. You Did Not Keep Your Beneficiary Designations Updated. You now understand that your estate plan has to match what you put on the forms for your accounts. However, your DIY estate plan may still have problems in regard to making regular updates. It is critical for you to remember, if you decide to change a beneficiary designation you must do it both on your accounts and in your estate plan. This may be avoided if you discuss and keep updated your estate planning needs with a qualified estate planning attorney.
3. Why Not Make Your Estate a Beneficiary? You may decide at this point to make your DIY estate simple by making your estate the beneficiary of every account. A word of caution, if you do this in your DIY estate plan, you could run into unintended tax consequences. It would be important to consult a Connecticut estate planning attorney for more information on this particular subject
We know this blog may raise more questions than it answers. We want you not to wait to learn more about this critical issue facing all of us, but most importantly Connecticut seniors. Remember, being prepared is the best defense you can have in place. The Northeast Law Center practices law in many Connecticut counties including Hartford, New London, Tolland and Windham. We encourage you to contact us and schedule a meeting.