Back in 2021, we shared our list of the “Top 10 Fatal Estate Planning Mistakes.” That article highlighted the most common oversights that can undermine your ability to protect yourself, your loved ones, and your legacy.

Here's a quick refresher of the original Top 10:

1. No plan at all
2. No plan in case you are incapacitated
3. No back-up parents for your children
4. No inheritance protection for your heirs
5. Not understanding and utilizing federal death tax exemptions
6. Not taking advantage of the annual gift exclusion
7. No estate planning for life insurance
8. No probate avoidance planning for multi-state real estate
9. No income or estate tax planning for retirement plans
10. No asset coordination with trust

Since then, we've come across even more pitfalls that people frequently overlook. Avoiding these additional missteps will help ensure your plan works exactly as intended.

1. Not discussing your plan with loved ones

Even the most well-crafted estate plan can lead to confusion, disputes, or delays if your key people aren't informed ahead of time. Take the time to discuss your plan with your executors, trustees, agents, and loved ones. Let them know where your documents are kept (keep them easily accessible), who to contact if something happens, who is responsible for what, and your wishes. This clarity can go a long way in reducing stress and preventing litigation down the road.

2. Having only a primary beneficiary

Every account or policy with a beneficiary designation should also have at least one contingent (secondary) beneficiary. If the primary beneficiary passes away before you and no contingent is named, that asset may end up in probate. By naming one or two contingent beneficiaries, you ensure your asset passes smoothly to the next intended person.

3. Not making your final arrangements

Preplanning your burial, cremation, or memorial service is a gift you can provide to your family. During a time of grief, these decisions can feel overwhelming. By planning in advance, you lift that burden and ensure your wishes are followed, right down to how you'd like to be remembered and celebrated. For this reason, we provide our clients with a memorial instruction workbook to include in their plan documents.

4. Overlooking your favorite charities

If charitable causes have been important to you in life, they can continue to be part of your legacy after you pass. You can support your favorite causes and organizations through tools such as donor-advised funds, charitable trusts, family foundations, or naming a charity as a beneficiary of a life insurance policy or investment account. An additional benefit to giving is that it can reduce your estate taxes.

5. Ignoring your digital assets

From social media accounts and photo libraries to email accounts and online banking, digital assets are now a critical component of your estate. Without proper planning, your representatives may not be able to access or manage them. Work with your estate planning attorney to create a list of digital assets and access credentials, and give written legal authorization for someone to handle these accounts.

6. Choosing the wrong people

Naming executors, trustees, or guardians isn't just about loyalty; it's about capability. These individuals should be trustworthy, organized, mature, and aligned with your values. Ideally, they should also possess the necessary financial or legal knowledge to fulfill their responsibilities or be willing to seek professional help when needed. Once you have designated your trusted individuals, reevaluate them regularly when reviewing your estate plan to ensure they remain the best fit for their positions.  

7. Not planning for disability or long-term care

Estate planning isn't just about what happens after you're gone; it's also about what happens if you become incapacitated. Having Powers of Attorney for medical and financial decisions is essential. Additionally, planning for long-term care, including nursing home costs, is key. Many people use Medicare funding for their nursing home care, but this is only available once their financial resources have been exhausted. If you have a spouse remaining at home, this can cause unnecessary financial hardship. Avoid this by creating a special needs trust that can protect your spouse while ensuring you qualify for the Medicare funding.

8. Forgetting to update your plan after a move

Estate laws can vary widely from state to state. If you relocate, especially to or from a community property state, your existing estate plan may not align with the laws of your new state, and the protections your plan initially afforded you may no longer be effective. Estate and income tax laws, probate rules, and property ownership norms can all shift. Review and update your plan with an attorney licensed in your new state to maintain full protection.

Avoiding these common mistakes can help ensure that your wishes are honored, your family is protected, and your legacy is preserved. If you're unsure whether your current plan addresses these issues, it's time to schedule a check-in. Click here to schedule an appointment with us.

^Sources:

^{https://www.kiplinger.com/slideshow/retirement/t021-s014-10-common-estate-planning-mistakes-to-avoid/index.html
https://trustandwill.com/learn/estate-planning-mistakes
https://www.fidelity.com/viewpoints/wealth-management/estate-planning-common-pitfalls
https://www.findlaw.com/forms/resources/estate-planning/estate-planning-mistakes.html#content-3}