The recent media circus surrounding the death of Anna Nicole Smith detailed a nightmare scenario in estate conservation. The former model, whose finances had always been tabloid fodder, died five months after her son and only designated heir, Daniel, leaving an out–of–date will and possibly an entire fortune at the mercy of the courts.
Since Anna Nicole’s death in February 2007, many financial professionals have reported a sharp increase in the number of clients interested in keeping their estate documents current.1
An out-of-date estate conservation strategy is about as useful as having no strategy at all. By updating your estate documents periodically, you can help protect the assets you wish to pass on to your heirs.
Consider the following mistakes that many people make with their estates.
Head in the sand.
When was the last time you looked at your will? Take the time to review your will periodically. If you have experienced any major life changes (such as a divorce or new grandkids), you may need to reflect these changes in your will.
Hide and seek.
In this increasingly paperless society, many of us have little in the way of physical evidence of our various accounts and investments. To prevent your heirs from having to go on a scavenger hunt, you should leave a detailed list that includes the location of safe-deposit boxes; information on banking, brokerage, and insurance accounts; and a list of accountants, advisors, insurance agents, and lawyers.
Mis-trust exercises.
Trusts can be a great way to help preserve assets for future generations, but they involve a complex web of tax rules and regulations. Consult an experienced estate conservation professional before implementing trust strategies to make sure that your trusts are structured properly. Also make sure that the trust is funded, you’ve designated the beneficiaries, and you’ve named an appropriate trustee.
You built your wealth over the course of your lifetime. Don’t make a mistake that could put your legacy at risk.
