In Pennsylvania and elsewhere, the accepted premise is that anyone with an average number of assets needs to have an estate plan. There are many horror stories of substantial losses or inconveniences suffered by people who did not have an estate plan or who did not keep it updated. Partial estate planning can also leave a void that comes back to haunt the benefactor or the family later on.
For a married couple, the failure to have an estate plan can lead to confusion, inconvenience, temporary lack of access to assets and loss of assets in potential cases to other persons not favored by the decedent. The problems of a married couple without an estate plan may be magnified greatly if it is a second marriage for both, or if one of the spouses has children from a prior marriage. Even with a will, there may be a significant problem if the decedent did not make provisions outside the will to assure the distribution of assets to children from a prior marriage.
The last will and testament is the centerpiece of the estate plan. The will makes it all much easier and prevents the assertion of ownership of assets by those not included in the will. A person dying without a will leaves family members relying on the provisions of state law, which may not protect and favor the individuals that the decedent wanted favored. The failure to update the estate plan and to do normal housekeeping can also result in an occasional tragic mistake.
Thus, failing to update one’s beneficiary designations on retirement accounts, life insurance or investment accounts may, for example, give a prior spouse a windfall and leave one’s current spouse in dire straits. Updating is important also with respect to living trusts and testamentary provisions. As always, it is important to regularly consult with one’s estate planning attorney, as there are a number of estate planning tools and options available under Pennsylvania law that can be best chosen, prepared and maintained in concert with the attorney’s support and professional guidance.
Source: CNBC, “No will or estate plan? Big problem for you and your heirs“, Sarah O’Brien, Aug. 9, 2016