The most common estate planning mistake actually has to do with accounts that should fall outside of your estate: your retirement and life insurance accounts with beneficiary designations.
Many people just set up their accounts and forget to go back over them with any regularity. But, things change and life happens. It’s not uncommon for people to still have their ex-spouse named as a beneficiary on their retirement or life insurance accounts. Or someone who’s already passed away.
In North Carolina, divorce cuts off inheritance rights between ex-spouses, but it doesn’t have any impact on your accounts with beneficiary designations.
The fix is simple: most plan administrators will have a short form that you have to fill out to change your beneficiary. This should be revisited regularly – at least every 2-3 years and after a major change in your life (divorce, death of a family member, etc.).
If you die with defective beneficiary designations, that account will become part of your probate estate instead of passing outside of your estate.