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Estate planning can be undone by beneficiary mistakes

One of the least enjoyable chores for many Arizona residents is contemplating how their affairs and property should be disbursed after their demise. However, once one has settled down to the task of estate planning, it is important that errors do not undo all of the hard work. Those who are unsure about certain details relating to trusts may benefit from learning more about selecting beneficiaries.

One of the most important points is whether cash assets would be a desired form for inheritance. If so, then provisions must be made for ensuring that these types of assets are available for executors to disperse. A trust is often set up to minimize taxes to both the estate and to future heirs. If these trusts are not fully utilized due to individuals chosen as beneficiaries over the trust, it may create an unintended estate tax burden.

If a trust is named as a beneficiary, it is vital that all information is recorded accurately as any errors may result in the trust not being funded. Furthermore, it is important that the trust is correctly identified as revocable or irrevocable. Professionals recommend that spouses are not named as direct beneficiaries as a trust usually provides for a surviving spouse and also preserves assets for other purposes. Likewise, it is best not to make any last minute changes in beneficiaries in the stress of the moment as this may nullify one's intended plans.

Lastly, when including holdings such as IRAs and other qualified accounts as trust assets, it is important to make provisions to handle tax consequences. Arizona residents who are working to develop their plans may be uncertain as to how to proceed. An experienced estate planning attorney can provide guidance in drafting the plans that will ensure one's wishes are carried out as desired.

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