Some Georgia residents may think that creating a will is enough to ensure that assets are passed down to the right loved ones. Unfortunately, this is not always the case. Some assets, such as retirement accounts and life insurance, pass by beneficiary designation. There are a number of common errors that can be made with these assets.
One frequent mistake is failing to make a beneficiary designation at all. If this happens, state law decides what becomes of the asset. However, this usually involves more time and expense for heirs and can have tax implications. Another error is not taking special circumstances into account. Whether those circumstances are minor children, irresponsible heirs, heirs with special needs or something else, there are strategies for safeguarding the inheritance, but it must be done with a properly created trust.
Some beneficiary designations are confusing. If family members have similar names, such as a junior and a senior, there could be problems that might even lead to litigation. In other cases, beneficiaries will change. This might be the case after a divorce. Beneficiary designations should be reviewed regularly. In order to avoid these and other errors, it may be best to review beneficiary designations with the assistance of an attorney.
Beneficiary designations override wills and trusts, so it's best to approach them as part of the overall estate plan. If it is necessary to create a trust, an attorney may be able to assist with this as well. A common error in creating a trust is failing to fund it. Another error is appointing the wrong person as trustee. In some cases, managing a trust will be too much for a family member who lacks legal and financial expertise.