Failure to name a contingent beneficiary on insurance policies and retirement accounts or updating this information is a typical error. Not naming a contingent beneficiary can leave an estate open to probate and creditors. For an IRA, this failure can eliminate a tax break to the person who inherit the account to draw out distributions over their life expectancy.
Forgetting to update beneficiaries, such as leaving an ex-spouse as an IRA beneficiary, can have the unintended consequence of leaving current family members from receiving the account's assets. Beneficiaries named on policy or account will receive its assets despite the contents of a will or prenuptial agreement.
Naming specific bequests in a will may also cost money and time if the person who died no longer owns that investment. For example, that person may have purchased a stock years ago at a lower price and may no longer own these shares. These stocks may have to be repurchased at a higher cost. Since specific bequest are resolved first, other heirs and beneficiaries may ultimately receive less assets.
A residuary clause should not be omitted. This covers everything that is not identified in the will, that was not remembered for inclusion in a will or trust, property that have not yet been purchased or assets that a person may not know that they own.
Leaving assets to a minor without assigning a custodian is another common error. A person must be identified to handle their money and specifically define how it will be used for their benefit.
An experienced estate attorney can guide clients through these matters. Legal assistance helps assure that needs are met and valid documents are executed.