Estate Planning TipsThose who have begun the process of drafting their last wills and testaments must never forget to review the beneficiary paperwork associated with their life insurance policies and investment accounts. This is especially true with regard to individual retirement accounts (IRAs). One of the biggest estate planning mistakes that people make while planning their estates involves incorrectly completing the beneficiary documents associated with IRAs.

One such case recently made the news regarding the IRA funds of a man in his 80s who died of cancer. In the time leading up to his death, the man made various estate planning preparations to ensure his children received the lion's share of his estate and retirement money. However, a simple and often-made error completely destroyed those plans. He failed to individually list his children along with the percentage of the account they would receive on his IRA beneficiary form. Instead, he simply wrote that his IRA shall be distributed in accordance with his will.

$400k of Children's Inheritance Went to Step-Mom

As a result of this tragic mistake, the assets in the man's IRA, which were valued at approximately $400,000, went to the man's wife, whom he had married only a couple of months before he died. The man's children were left devastated by the news. His daughter -- who is a single mother raising two boys -- expressed her sadness over the fact that her father's wishes cannot be carried out due to this technicality of the law, which causes beneficiary forms on financial accounts to overrule the instructions contained inside a last will and testament.

Estate Planning Professionals Know How to Avoid Common Mistakes

If any good could ever come from this situation, it is the fact that it draws attention to this important estate planning issue. Estate planners must remember to review beneficiary forms associated with all financial accounts -- such as bank accounts, investment accounts, certificates of deposits, mutual funds, stocks and insurance policies. Fortunately, estate planning professionals know about issues like this and they know how to assist individuals to sidestep fatal errors so that their wishes can be carried out appropriately after they pass away.