June 24, 2025

Estate Planning Mistakes to Avoid: A Friendly Guide

Estate planning might sound intimidating, but it’s one of the best gifts you can give your loved ones. Unfortunately, it’s easy to make mistakes that can cause confusion or even family disputes later on. Let’s chat about some of the most common estate planning missteps and how you can avoid them using advice from trusted legal and financial experts.

Putting Off Your Estate Plan

It’s normal to want to avoid thinking about what happens after you’re gone. But if you don’t have an estate plan in place, state laws will decide who gets your assets—and that might not match your wishes at all. This can also create extra stress for your family when they’re already dealing with a tough time. However, starting your estate plan sooner rather than later can bring a sense of relief, knowing that you've taken a smart step to protect your loved ones.

Not Keeping Your Plan Up to Date

Life is constantly changing. Whether it’s a marriage, divorce, a new child, or a change in your finances, these events should prompt a review of your estate plan. If you don’t update your documents, you could accidentally leave someone out or give assets to someone you no longer intend to. Regularly checking your estate plan ensures it always reflects your current wishes, giving you a sense of control over your legacy.

Overlooking Beneficiary Designations and Asset Titles

Some assets, like retirement accounts and life insurance policies, go directly to the person you named as beneficiary, no matter what your will says. If you forget to update these designations, your money could end up with the wrong person. The same goes for how your property is titled—if it doesn’t match your intentions, your estate plan might not work as you hoped.

Picking the Wrong Executor or Trustee

Choosing who will manage your estate is a big decision. If your chosen executor or trustee can’t do the job or isn’t available, it can lead to delays and even family disagreements. Make sure you review your choices regularly and pick someone responsible and trustworthy. This responsibility can give you a sense of pride in ensuring your estate is in good hands.

Ignoring Tax Implications

Taxes might not be the most exciting part of estate planning, but they’re essential. Even if your estate isn’t large enough for federal estate taxes, state taxes and capital gains can still affect what you leave behind. Outdated trusts, like old AB trusts, can also create tax headaches for your heirs. Working with a professional can help you avoid these pitfalls.

Forgetting About Digital Assets

In today’s world, your digital life matters. Without clear instructions for your online accounts, cryptocurrencies, or digital files, your heirs might not be able to access them at all. Including digital assets in your estate plan is a smart move.

Not Planning for Incapacity

Estate planning isn’t just about what happens after you’re gone—it’s also about what happens if you can’t make decisions for yourself. Setting up powers of attorney and healthcare directives ensures your wishes are followed if you’re ever unable to speak for yourself.

Using DIY Documents

Online templates might seem easy and convenient, but they often miss the details that make your situation unique and may not follow your state’s laws. It’s always best to work with a qualified attorney who can tailor your plan to your needs.

Overlooking Securities Law Issues

If your estate includes assets such as private company stock or unregistered investments, transferring them could trigger securities law issues. Your heirs might not be able to sell these assets easily, or your trust might not be allowed to hold them. It’s essential to consult an expert to ensure you’re adhering to all the rules.

Disclaimer

This article is for informational purposes only and does not constitute legal, tax, or investment advice. Estate planning involves complex legal and financial considerations, and you should consult with qualified professionals, including attorneys, tax advisors, and financial planners, before making any decisions. Nothing in this article should be construed as an offer to sell or a solicitation of an offer to buy any securities. Estate planning strategies involving securities must comply with applicable federal and state securities laws and regulations. The U.S. Securities and Exchange Commission (SEC) does not endorse or recommend any specific estate planning strategy or professional.

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Estate Planning Mistakes to Avoid: A Friendly Guide

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