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Keep your will and estate documents up to date, or else

by | Apr 23, 2014 | Estate Planning |

California residents likely read and hear about the different mistakes people can make in their estate plan. For some Californians, the biggest mistake may be in simply not having an estate plan. Unfortunately, people who fall into these common traps may have their life savings fall into the wrong hands, or the money could languish in the court probate process for years. In both of these cases, it is the intended heirs that are deprive of their rightful inheritance, not to mention the issue without mounting legal expenses.

Avoiding probate is an extremely important objective in a California estate plan, but perhaps the only thing worse than probate would be if inheritance money went to the wrong person. For example, look at the case of a person who goes through a bitter divorce, but never updates his or her estate plan for whatever reason. If that person dies with their ex-spouse still named as the beneficiary, California courts generally treats the named, ex-spouse as if he or she had predeceased and, therefore, the ex-spouse is unable to inherit anything from the decedent’s estate. But not every state follows this rule. In some horrible twist of fate, a person could unwillingly leave his or her estate to an ex-spouse.

Even if the ex-spouse does not get the money, it still leaves the question of where the money will go. Some people name a contingent beneficiary in their will, in the event that their primary beneficiary has already deceased or is otherwise unable to inherit due to state law or circumstance like divorce as described above. This contingent beneficiary may be able to inherit, but if not, then the estate may be forced through the probate process.

After a divorce or any major life changing event, including the birth of new children, grandchildren or other heirs, it is wise for a person to update a will and other estate planning documents. Otherwise intended beneficiaries may suffer serious consequences if an estate plan is not in order. Estate laws vary from state to state, so people in California need the help and experience of a local attorney to help them avoid these common estate planning mistakes.

Source: CNBC “The 5 biggest estate-planning blunders,” Shelly Schwartz, April 14, 2014

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