9 Estate Planning Mistakes and How to Avoid Them

by Ann F. Schrooten, Estate Planning and Probate Attorney, Fitzgibbons Law Offices

Many people are using their stay-at-home time to tackle important projects they had been putting off, including creating or updating their estate planning documents.

Estate planning is a complicated process, and every estate plan has unique features. Many of the common estate planning missteps we see, if not caught and corrected, can lead to unintended and expensive consequences. The good news: With the help of an experienced estate planning attorney, these mistakes can be avoided.

Following are nine of the most common estate planning mistakes.

  1. Not Having an Estate Plan. We are always surprised by the number of people – especially those with substantial assets and close family relationships – who have no plan in place to control what happens to their property after their death. Dying “intestate” – i.e., without a will – can impose a real hardship on your loved ones and cause your estate to be tied up in probate court.
  2. Do-It-Yourself Estate Planning. Downloadable will and trust forms are convenient and relatively inexpensive, but they do not offer the thoughtful, strategic insight that can be gained only from an experienced estate planning professional who can anticipate your needs and help you avoid mistakes. Moreover, the failure to properly execute and/or witness a do-it-yourself will or trust can render your important documents worthless.
  3. Failure to Fund Your Trust. One of the most common and costly consequences of a do-it-yourself or “discount” trust is not making it the owner of your property. “Funding” your trust is a crucial step; if you die with your assets titled in your name and not the trust’s, the assets you intended to pass smoothly to your trust’s beneficiaries can be hung up in probate, with the risk that they will not be managed and distributed as you intended.
  4. Not Having Advance Directives. End-of-life planning ensures that your wishes are honored. A living will allows you to express your wishes regarding life-sustaining measures, and a health care power of attorney appoints a trusted person to make decisions on your behalf if you are no longer able to communicate your wishes.
  5. Not Updating Your Estate Plan. Time passes quickly, and life events can cause estate plans to become obsolete. Be alert to changes in your personal or financial situations. Retirement, divorce, marriage, deaths, births, tax law changes, business startup or sale, relocations, etc., are just a few of the many events that can trigger the need to update your will or trust.
  6. Do-It-Yourself Revisions. Changes you make to your documents can create a conflict with other provisions of your plan, impose a provision that cannot be carried out, or lack clarity with respect to your intent. Once-valid documents that were inadvertently corrupted by do-it-yourself revisions can lead to family squabbles and lawsuits.
  7. Choosing the Wrong Personal Representative or Trustee. When you create a will or trust, you name a trusted person to serve as your personal representative or successor trustee. Selecting that person is not a decision to be made without some thought. The person who serves in that important role should be chosen on the basis of their temperament, integrity, knowledge, and ability to properly administer your estate and/or trust.
  8. Ignoring Beneficiary Designations. Retirement accounts, life insurance, and investment accounts all avoid probate by having a beneficiary designated. These designations prevail over contrary provisions in a will or trust. You should review your beneficiary designations on a regular basis to make sure you have named a beneficiary and update your designations as circumstances dictate.
  9. Overlooking Your Digital Assets. People are increasingly living their lives in the virtual, digital world, with bank accounts, photographs, cloud-based storage, and social media accounts being accessible only online. Your power of attorney, personal representative, and trustee need to have specific authority to access and manage your digital assets. Without providing this authority in your documents, administering your digital assets becomes impossible and can lead to financial and emotional hardships.

Ann F. Schrooten is an estate planning and probate attorney at the Fitzgibbons Law Offices in Casa Grande (520-426-3824