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7 Common Estate Planning Mistakes As You Prepare for Railroad Retirement

Video Financial Planning Estate Planning


Are you making any of these mistakes when it comes to your estate plan?

Welcome everyone to another edition of the Highball Advisors Railroad Retirement Whiteboard. My name's John McNamara of Highball Advisors, and today we're going to talk about that fun topic of estate planning. Yeah, okay. Well, anyway, I highlight seven common mistakes when it comes to estate planning. Big topic, actually. You got to get this estate plan done, all right? It's just one of those things that can sink the whole ship. As I like to call it, an iceberg. So a lot of people don't like doing it, just get it done. It's the estate plan, put it away. Well, actually, you're going to review it, but at least you know the foundation's in place, and then we can fix it later on.

So, here's seven common mistakes when it comes to estate planning. Number one, not updating the estate plan regulator, right? Just talk about, so there's certain things that you might have to update. Major life events and change in assets. Maybe you came into some money. Changes in tax law. Even changes in beneficiary.

So I get a lot of people, "Oh yeah, I did a estate plan." Well, the kids might have been like three years old and now you're ready to retire. You got grandkids, you got this, that going on, right? Just because you did it 20 years ago doesn't mean. So update that update regularly that estate plan, very important.

Number two, failure to update the beneficiaries, right? Things change. You might have the wrong beneficiaries in there. The beneficiaries that were there 15 years ago might not be the same beneficiaries that you want today. So check that out. Remember, if you don't have the right beneficiaries, it's going to probate and then the courts are going to decide, right? Possibly the courts are going to tell you where things are going to go. You want everything on your terms. So update those beneficiaries.

Number three is not planning for multiple post death distribution. So that's basically, obviously things come up in life, so you might have a beneficiary might have deceased. So now, "Oh, I got to get a new beneficiary in there. Make sure those are update."

Or nightmare scenario is the common accident. What happens if your primary beneficiaries and your contingent beneficiaries, something happens in an accident or something. You got to think about that also. So not a great thought, but it's just one of the things with the estate plan.

Requiring mandatory distributions to beneficiaries. So that's kind of a big thing. Especially if you have younger kids. You might set things, "Hey, you get a certain amount at 18, 25, 30." Well, what happens is creditors can latch onto that. So you want to keep an eye on that also. So you might probably don't want to do that.

And then failure to consider creditor protection in the estate plan. Very important right? Especially when it comes around divorce, right? Might put a claim in on that. So you got to have that creditor protection in the estate plan. Very, very important. So keep an eye out on that one.

Moving along, number six might have the wrong trustee. So once again, "Hey, I did the state plans 15 years ago. Is that trustee even around?" So is that a current or is the trustee the best interested in the family? Is this person really serving the family that I've worked so hard to provide for? In the best interest or even the necessary skills? Yeah, well, it might be a blood relative, but do they have the right skills to be a trustee? So these are the things you want to be thinking about. And then obviously, is the trustee even alive? Once again, hey, I did this long time ago. Is that person even alive?

All right. And then another one is, final one, number seven is not planning for retirement assets. So if you have, let's say a 401k, that type of thing, it goes to the spouse, right? So that's kind of, that's right, okay. But after that, right, then the spouse can designate wherever it wants to go after that. Not sure if you want that. Maybe some people do, some people don't. But that's something you want to think about saying, "Okay, well here's I've given everything to my spouse." Which is fine, but then life goes on. They might do something else that might not have been in your best interests going forward. So it's just something to think about when it comes to that part.

Just checking all the boxes. So I hope you found this video helpful. Feel free to reach out to me if you have any questions. One of the things I do with the Boarding Ferrero Retirement Process is we kind of go through that estate plan. I want to make sure that all gets documented, right? Its must-have, so to speak. Click on the notification bell to get the latest video. Please subscribe to the channel. I do appreciate that. And until next time, everyone, please stay safe, stay on track, and take care. So long everybody. Bye.

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved from Highball Advisors, and all rights are reserved.