Biggest mistake people make when estate planning | Estate Planning Daily 036

Hey, everybody, what’s going on? It’s Christopher Small from CMS Law Firm coming to you live again just like yesterday and the day before that and tomorrow.

One of the things that I wanted to talk to you about today was something that I was just hired for it actually, and it’s something that I see all the time. Something that is not a big problem, but that is easy to fix, and easy to take care of if you plan for it and can literally save you thousands of dollars, can save you, I don’t know, hours and hours and hours and hours of frustration and just work really.

And what I’m talking about is, and by the way, I shouldn’t be telling you this because it’s literally just eliminating work for me. Okay. So there you go. This isn’t an estate planning thing, it’s something that I have all my clients do, but it’s really a probate avoidance technique. Okay.

If you don’t know what probate is, probate is technically at its core essence, the process of transferring one’s person’s property to somebody else. Okay? So if you die and you have a house and you want to give it to your kid, probate is the process of actually transferring that house to the kid. Okay. It’s a court process. Really, technically, you are sort of suing yourself to be able to do this and it just takes time. Typically, you have to hire an attorney to do it. It costs you a couple grand at least and it cost you a lot of time because there’s just a lot of sort of administrative stuff to do, a lot of work to do. But there are some ways to avoid this that if you are just prudent and sort of think ahead, then you can take care of it.

And for me, like I said, it’s part of the normal course of estate planning for my clients. We always talk about probate. We always talk about probate avoidance, and we were talking about what I’m about to tell you now because it’s so easy to do. The upside is so big and they’re literally just no downside. Okay.

If, by the way, I have to put a little plug in here, if you want to talk to me, I’ve got a strategy session link in the little title or whatever, but if you want it just a general overview of the probate process as well, you can go to and you can see that. It’s sort of the general talk that I give all the potential clients that come into my office. It won’t be specific to your family and your needs necessarily, but it’s a very, very good general overview of what a basic estate plan looks like and what sort of a basic plus, that’s the way that I describe it, estate plan looks like.

So like I said, what I’m about to talk about now is part of that planning process, but you’re going to want all this stuff that I talked about in that video to sort of compliment or go with what I’m about to tell you right now.

So what am I about to tell you right now?

The biggest mistake that I see that people, people make when it comes to this planning process and when it comes to probate avoidance specifically is failing to make sure that their beneficiary designations are up to date on their accounts, on their investment accounts, on their bank accounts, on basically anything that retirement accounts, pensions potentially, depending on what kind of setup it is, but basically on anything that has a beneficiary designation or transfer on death designation, failing to have those things is the biggest problem.

And the reason is is that even if you have one account that doesn’t have a beneficiary designation on it, you’re going to have to do a probate. That’s exactly what happened to my client that came in the other day. She had a relative pass and there was one account basically, that did not have a beneficiary designation on it. And it was the type of account … So this is sort of getting into weeds.

There are some ways to get around this. Sometimes. Sometimes there are not. Right. And with some of these accounts that you cannot get around it. And if you can’t get around it, the only solution is to open a probate.

Like I said, it’s not an overly complicated process. It’s just expensive and it’s going to take extra time and effort and work that you wouldn’t need to take and you wouldn’t need to spend if you just made sure that your beneficiary designations were up to date.

What does is a beneficiary designation? It basically says, “When I die, I want my stuff to go to this person,” or to these people. You can split it up as many ways as you want. And then when you die, basically those people just take a death certificate to that account holder, the bank or the investment place and they just cut you a check. Life insurance company cuts you a check, but if you don’t have a beneficiary designated, then you have to typically go through the probate process because they transfer those funds into an estate account and then via the estate account they are transferred to the people that they are supposed to go to. All right.

So while you’re here, if you’re interested, what you should do is make a list of all your accounts and just call those institutions and say, “Hey, can you tell me first, do I have beneficiary designations on these accounts?” That’s number one question. If they say, “No,” the second question is, “Send me the paperwork so I can add a beneficiary on my account.” Okay? If they say, “Yes, you do.” Then the second question is, “Who is that person?” Because you may have done this a long time ago.

I also know, by the way, one other sort of caveat here, if you end up getting divorced, you’re going to want to make sure that you go and change those beneficiary designations because there is a chance that if your ex-spouse is the designated beneficiary on a life insurance policy for example, and you die, that your ex-spouse can get your money and you may not want that to happen and if you don’t, then you should keep your beneficiary designations up to date.

All right. That’s sort of the lesson of the day. It’s a probate and estate planning lesson all rolled into one, which are my favorite two birds, one stone. But again, if you want the full estate planning overview, go to and check that out.

What I talked about right now with these beneficiary designations really complements that stuff because in case you do forget, you want to make sure you have an updated plan to make sure that everything goes where it’s supposed to go, and then estate planning also obviously, covers you while you’re alive too. If you don’t know why go watch the video.

All right, that is it. I am Christopher Small. I’m the owner, CMS Law Firm, real estate planning. We do probate.

If you like this video, please show me some love and hit the like button. If you know somebody that would enjoy this video or could use this video, please share it with them. And if you want to talk some more, hit the link and schedule a time to talk with me. It’s free. I love talking.

All right, so that is it. Have a great day and I will be here again to talk to you tomorrow. See you.