Your estate plan may include numerous documents. You may have a simple will that names a guardian for your children and designates beneficiaries for some of your assets. You might have a trust that changes the official owner of your home or other valuable property to protect it from creditors and other liabilities. Many people also add advance directives talking about their medical preferences and powers of attorney to protect themselves in an emergency that results in their incapacitation.
Your estate plan might talk about life insurance, as for many people, their policy represents how they intend to pay for their funerals or cover their remaining debts when they die. Whenever you update your estate planning documents, you likely need to reach out to the insurance company as well. Otherwise, the outcome of estate administration could be far different than you expect.
You need to keep your beneficiary designations updated
Sometimes, people have to make drastic changes to their estate plans because they lose a loved one, get divorced or change their personal holdings. Frequently, people only focus on the documents that they have drafted with the assistance of an attorney and fail to consider their actual life insurance after those changes.
The beneficiary designations on your policy paperwork should match what you put in your estate documents. Otherwise, you may expect one person to receive those life insurance proceeds, but the company will pay them out to someone else entirely. If there is a conflict between your policy documentation and your estate plan, the paperwork filed with the insurance company will take precedence. Your ex-wife could receive your policy payout instead of your children, for example.
Reviewing your documents is a smart move for your protection
Even those with good intentions can make estate planning mistakes and oversights that irrevocably change their legacies or diminish what they leave for the people they love the most. Simply drafting documents isn’t enough. You need to make sure that they are accurate and up-to-date based on both your personal circumstances and changes in the law.
Reviewing and updating your estate planning documents will help you maintain control over your legacy and protect your family.