Three key areas overlooked in estate planning and our guide to the estate settlement process.

Senior Vice President Rob Miles and Senior Estate Advisory Specialist Austin Bertrand discuss three key areas people tend to overlook in their estate planning.

Audio: Three Estate Planning Missteps to Avoid

Transcript: Three Estate Planning Missteps to Avoid

Host: Rob Miles, Senior Vice President, Wells Fargo Private Bank
Guest: Austin Bertrand, Senior Estate Advisory Specialist

[Rob]: Hello, I'm Rob Miles, Senior Vice President for Wells Fargo Private Bank. I'm joined today by Austin Bertrand, Senior Estate Advisory Specialist for Wells Fargo Estate Settlement Services, to discuss missteps to avoid in estate planning. Austin, as an estate advisory specialist, you work with clients to help settle estates. What are some common missteps that you see?

[Austin]: Well, Rob, most people use trusts or wills to transfer their wealth which is a good first step in estate planning. Having your wishes documented so your assets are distributed in the manner you want is important versus having your loved ones figure out what you wanted after death. That said, we see three key areas people tend to overlook in their estate planning: First, ignoring family discord, second, keeping estate plans up-to-date, and the third, neglecting to include gifts of personal property.

[Rob]: So Austin, are their steps that our audience can take to minimize potential family discord?

[Austin]: Absolutely, Rob. We often see issues arise when clients have not talked to their spouse, their children or their other family members about why the will or trust was set up a certain way and the reasons for leaving something to a certain family member over another. Making your wishes clear to your family before your passing can help alleviate any family rifts (and potentially, litigation) if the plan isn't what they expected.

[Rob]: That makes a lot of sense, Austin, so if your child expects a particular amount and doesn't get that amount that can lead to resentment and disagreements within the family. Can you talk a little about keeping estate plans up-to-date? Why is that so important?

[Austin]: Sure. So, if you've recently experienced a significant life event, like getting remarried or the death of a spouse or child, your plan should be reviewed for any potential updates. Specifically your plan might need to be revised to include or exclude family members from your estate. A common situation we see involves retirement assets, like IRAs or your insurance policy, often times a client might forget to remove a former spouse as a designated beneficiary of their retirement account. So you want to keep in mind that retirement assets are subject to complex laws and transfer in different ways so it's critical to review your plan when your life circumstances change. Ultimately conducting regular reviews of your estate plan, as well as all beneficiary designations can help reduce estate settlement issues down the road.

[Rob]: So, Austin to put it simply, estate plans should not be something where you set it and forget it. So it's imperative to review your estate plan on an ongoing basis as life changes. Let's now talk about including personal property in an estate plan. Should personal effects or family heirlooms be included in such a plan?

[Austin]: Great question, yes, gifts of personal property like furniture, clothing, or artwork, should be considered in an estate plan. While the actual value of these items may seem insignificant to an average person, the sentimental value of these items is likely to be priceless to your family. In that regard, documenting how your personal property should be distributed can help reduce conflict between beneficiaries. And lastly, don't forget to include an inventory of your digital footprint, like your social media profiles, and don't' forget gifts of your digital assets, such as the airline mileage you've accumulated over the years. These digital items are often overlooked in modern estate plans because most people think of only making gifts of traditional assets, like real estate, investments, property and even cash.

[Rob]: All good points Austin. So, to sum up for our listeners, the three things to consider in your estate plan to your point:

1. Keep the family history in mind

2. Update your estate plan as life circumstances changes

3. Include personal property and digital assets as part of your plan

[Austin]: That's right, Rob. And, I would also add that trust, estate, and probate laws are complex and change frequently from state to state, so having a professional fiduciary in place can help with the estate settlement process.

[Rob]: Well, Austin let me thank you for your time and sharing your perspective. This is useful information for all of us to keep in mind during the estate planning process and review. And thanks to our listeners for joining this podcast.