As Connecticut residents go through the estate planning process, there are many factors to keep in mind. In juggling these many factors, it is important to remember that an individual will not be around when the time comes to distribute the assets that are left behind. It is for that reason why it is good to periodically review previously made estate plans, otherwise, significant problems could arise.

For example, one woman tragically died in her early 50s from breast cancer. Instead of leaving her adult children listed as the beneficiary for her IRA plan, she left her own mother. Because the woman's mother was on Medicaid, any inherited funds automatically went to the state. Presumably, the woman had listed her mother as the beneficiary when she was much younger and when her children were minors, but because she did not revisit the matter, the money in her IRA plan was effectively lost.

There are many common problems that can arise in estate planning, and listing the wrong beneficiary is just one among many. Another example is having the wrong guardian listed for one's children. For instance, if the guardian was someone who recently moved overseas, then the children may be forced to move with the guardian. The court may also challenge someone's choice for guardian of their children. To protect against this, it is helpful to explain the choice in writing.

Yet another major problem is inadequate life insurance. Young people, even those with children, are prone to forgo life insurance, but if someone passes away unexpectedly, then their loved ones are left having to struggle to find the funds necessary for funeral and other expenses. In one particularly tragic case, a mother who did not work was left with two children and no income after her husband passed away without life insurance.

Besides the three problems outlined above, there are many other common problems that may arise if one neglects to properly plan an estate. Fortunately, these problems are often easily fixed. Leaving these kinds of problems to fester may cause heirs unnecessary financial hardship and pain. Connecticut residents are thus encouraged to begin estate planning even if they are young and healthy.

Source: Forbes, "Five Crucial Estate Planning Mistakes You are Making," Nancy Anderson, Dec. 15, 2011