The Law Offices of William S. Dunlevy
Serving clients in Camarillo, Thousand Oaks and the surrounding areas of California
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Pitfalls and mishaps can be avoided with careful estate planning

The subject matter of estates and trusts in California is complicated. The individual or married couple must keep vigilant over their affairs to assure that no costly and troublesome mishaps occur. Even though estate planning may have been undertaken, a cavalier attitude in the years thereafter can lead to various disasters.

Perhaps one of the most common problems is the failure to name a contingent beneficiary on insurance policies and investment or retirement accounts. This is necessary in case the first selection for beneficiary predeceases the owner of the policy or the account. If the owner forgets or neglects to name a new beneficiary, the property will pass into the owner's probate estate after death, where it may be taxed and/or subject to extra fees, along with having the distribution itself delayed.

Naming a contingent beneficiary on an IRA protects the beneficiary's valuable tax break that allows extending tax payments over the beneficiary's own life expectancy. If there is no beneficiary because he or she died before the owner of the policy or the account, that "stretch" benefit is lost. People also run into problems when they don't go back and check all of their accounts after a divorce.

The failure to remove a former spouse as beneficiary can cause serious problems for a new spouse. This is particularly true for an IRA where there is no automatic replacement of the former spouse in the event of a remarriage. It is also necessary to sit down with one's estate planning attorney in the early stages of preparing a plan. For example, making sure that provisions are in place for what happens when a beneficiary predeceases the benefactor is just one example of the myriad of issues to pre-plan. Careful planning that is compliant with federal and California law is vital to protect the interests of oneself and one's loved ones.

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