It’s the little things that can really screw up an estate plan.

Case in point: A tax court ordered $436,000 worth of gifts be put back into an estate even though the checks were written and sent out prior to the decedent’s death. The reason? Ten of the 11 recipients failed to quickly cash the checks.

As we explain in this month’s Dispatches, the checks were written on September 6, 2015, on behalf of Donald DeMuth by his son, who was authorized to do so. Only one check cleared the bank before DeMuth passed. The rest didn’t and therefore are considered as part of the estate under Pennsylvania law.

Most people do not have estates large enough to exceed the federal estate tax exemption of $12.06 million for 2022 ($24.12 million if the surviving spouse claims the deceased’s exclusion). State taxes on estates and inheritances can have much smaller thresholds.

But small errors can have an impact beyond just taxes. In another case, proceeds from a deceased’s 401(k) plan went to his ex-wife because he failed to sign and send back the authorization form to change the beneficiary on his account when he was alive. (See “A Telephone Call Is Not Enough to Change a Beneficiary Designation” in the May 2016 AAII Journal Dispatches.)

Ensuring that your beneficiary information and all estate documents are current is critical to carrying out your wishes. It’s also prudent to inform your heirs about your plans. Even if you don’t want to go into specifics, give them enough information so they are aware of who they will need to contact and what they will need to do.

I would further suggest using National Estate Planning Awareness Week to have conversations about your finances with your spouse or someone else you want to step in on your behalf. The week takes place from October 17 through October 23 this year.

While you might think they will know what to do, the reality may be much different. I personally keep a list of accounts for my wife. I’ve also walked her through “my system” for ensuring the bills get paid. She has access to all passwords for our accounts—an important thing since we pay every bill electronically.

There’s more to estate planning than just deciding who will get what and keeping the beneficiary information updated. There is also the aspect of what the surviving spouse will do after they lose their soulmate. Most often, women outlive men.

We asked Willow—which aims to empower women and other underrepresented investors—for guidance that widows (and widowers) can follow. And since divorce also has significant financial implications, we asked them to cover the topic too. Among their suggestions were creating an inventory of your finances, updating beneficiary information and retitling accounts. You can see their article here.

If your spouse is not a regular reader of the AAII Journal, share the article them (regardless of their gender). It contains good information they should know.

Our Revised Growth Score

This month, we’re unveiling our revised Growth Score. The score underlies our A+ Growth Grade. Even if you’re not an A+ Investor or AAII Platinum subscriber, there is still much you can learn from Wayne Thorp’s explanation of what we did.

The first component is the consistency of growth. We look at how many times in the last five years a company increased its sales. We then consider the magnitude of growth—a key growth metric. Specifically, we factor in the magnitude of five-year annualized growth. Finally, we look at how consistently a company generates positive cash flow from operations to avoid those growing sales at the expense of profitability.

Like our Value, Momentum, Quality and Earnings Estimate Scores, our Growth Score is assigned based on rank. The better a company rates on all three components, the higher its Growth Score will be. The worse a company rates on the three components, the worse its Growth Score will be. All of our scores are quantitative. The data determines the score, not any biases toward one stock or another.

How would this score have worked in the past? I’ll refer you to Wayne’s article in this issue. He not only shows the backtested results for the entire score but also for each component. More importantly, Wayne explains why you should consider paying attention to each component if growth is part of your investing strategy.

Wishing you prosperity and good health,