Angela Alvig, CPA

How to Prevent Common Mistakes in Estate Succession

Published November 202010 minute readInsights from Angela Alvig

How to Prevent Common Mistakes in Estate Succession

Published in November    5 minute read    Insights from Angela

In the work we do, there are many situations where we step in as Power of Attorney or Personal Representative when needed. In doing this work, we have seen firsthand the common mistakes people make, leaving their estate management more difficult than it needs to be. We are sharing what we have learned, to help you mitigate confusion, stress, and extra steps for your trusted person who will handle your financial matters when you cannot.  

1. Verify all assets are properly titled and match up with your estate planning documents.  For example, if you have a Revocable Trust, make sure it is funded.

2. Update all beneficiary designations to your intended choice of recipient.  Beneficiary designations are required for retirement plan accounts (401ks, IRAs) and life insurance policies.  Their transfer will be based on the beneficiaries you list, not what your Will or Trust says.

3. Include a Letter of Direction for your Personal Representative / Trustee, regarding details on how you want them to handle your family and estate.  Even better, review this letter with that person now, and make sure there are no unanswered questions. 

4. Name a Power of Attorney and Health Care Agent so there is someone ready to step in on your behalf, both for your financial and health care matters.  This could be two different people, depending on skill set or your family situation.

5. As you age, elect a trusted person to pay your bills and watch your bank accounts, keeping an eye out for things that seem amiss.   

6. Form a team of experts to help manage your wealth and health, who have your and your family’s best interests at heart: Attorney, Accountant, Wealth Manager, Health Care Agent, Caregiver, Power of Attorney, Personal Representative, Trustee, etc.

7. Keep important items together and well-organized for a quicker, easier response when the time comes that you need assistance, be it financial or health related.

    • Compile all online passwords in a secure password management system and make sure your trusted person knows how to access it.  Remember to include the password for access to your phone and computer.
    • Label and sort bins, boxes, and valuable items while you still have energy 
    • Keep your financial documents in order and file in the same filing system
    • Label all keys and put in the same drawer, bin, closet or someplace easy to find 
    • Designate a drawer or closet to place small valuables such as cash/wallet/purse
    • Keep collectibles together and store any documentation about them in the same location
    • Keep current prescriptions accessible and together in a spot you will remember them
    • Store memorabilia and photo albums in the same area of your home

8. If you have family heirlooms, take photos and document where these items are stored. File this information with your other financial documents.  To minimize family arguments, make a Tangible Personal Property List, designating to whom these items should go upon your death. 

We acknowledge that it can feel a bit uncomfortable to give up full control and communicate your financial matters to other people in your life.  However, we know from experience that at some point, you will be required to do so, based on unexpected life events.  Thus, we recommend that you take these steps proactively - your trusted person will be forever grateful to you.

We specialize in all these tasks and can provide tools to ensure a smooth transition in the future. We also built a tool called the Optimize Your Life Organizer.  It is a DIY version of what we do for our clients and will walk you through the process of getting yourself organized. Click on Optimize Your Life to learn more.