When it comes to estate planning, a little foresight can go a long way. This is because what the law says about passing down assets may contradict with the wishes of someone who has passed away. For instance, it may not be possible to pass down assets from a grandparent to a grandchild without specifically including the grandchild in a will or trust.
Another common estate problem is failing to name a beneficiary to a trust or failing to update beneficiary forms. If assets are not titled in the name of the trust, the estate may go to a spouse even if there are documents stating otherwise. If no beneficiary is named, an entire estate may have to go through probate, which could delay the process of distributing assets to intended heirs.
For those who are part of an extended family, advance planning can avoid a fight that could last months or years. Creating an inventory of assets and creating a proper will or trust that determines who gets which assets can make distributing the estate easier. Otherwise, lawyers for all interested parties may need to spend time inventorying all assets and then trying to figure out how to divide the estate equitably.
Talking to an estate planning attorney may make it easier to give someone power of attorney, plan for estate taxes and otherwise increase the odds of an orderly transfer of assets. Without a proper estate plan, heirs and other beneficiaries may be at the mercy of state law to decide the final wishes of a deceased individual. However, with advance planning, a will or trust can be created that has a good chance of standing up to any legal challenges against it.
Source: Daily Finance, "Avoid These Estate Planning Nightmares", http://www.dailyfinance.com/2014/08/20/avoid-estat, December 13, 2014