After a divorce, most people would like to name someone other than their ex-spouses as beneficiaries and trusted helpers. Surprisingly, estate planning attorney, Newman Trowbridge Jr., failed to update his retirement account beneficiary designation after his bitter divorce. The result? Newman’s ex-wife inherited his entire retirement account. His new wife received no assets from the retirement account.
The Cobbler’s Children Have No Shoes
Newman was a sophisticated estate planning attorney who handled his own estate planning affairs. What would have been a common oversight by a lay person becomes a glaring err when committed by a professional in his own planning.
All Estate Plans Need to Be Updated
All estate plans need to be updated every one to three years to catch changes in your life, goals, and finances as well as changes in the law.
In addition, an estate plan will need to be updated sooner than the one to three year mark if you experience a significant life event as did Newman.
A divorce qualifies as a significant life event as does moving to a new state, marriage, new children, new business, and significant change in assets.
Reviewing and Updating Estate Plans Includes Beneficiary Designations
In addition to reviewing and updating your traditional estate planning documents, it is imperative (as evidenced by Newman’s lapse of judgment) that beneficiary designations are reviewed as well. Check your beneficiary designations: insurance policies, retirement accounts, pensions, and annuities.
Review and Updating Estate Plans Included Proper Asset Ownership
Keep in mind that your will only controls assets in your individual name; and, your trust only controls assets titled in the name of the trust.
Therefore, if you own any assets jointly (joint tenants with right of survivorship) as many couples do, your will and trust do NOT control these assets. This is how many children get unintentionally disinherited.
Where to Get Help with Updating Your Estate Plan
If you need to update your estate plan, consult with a qualified estate planning attorney.
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