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Estate planning is one of the most important steps you can take to protect your loved ones and ensure your wishes are honored. Despite the best intentions, it’s easy to make missteps that can lead to confusion, delays, or even conflict down the road. Whether you’re creating your first estate plan or revisiting an existing one, avoiding these common mistakes can save your family time, money, and stress.
Here are five of the most common estate planning mistakes and how to avoid them.
The Mistake
Many people delay estate planning because they think they’re too young, don’t have enough assets, or simply find the topic uncomfortable. However, life is unpredictable, and without a plan in place, you leave major decisions in the hands of the court.
Why It Matters
Without a will or trust, your estate will go through intestate succession, which means the state decides who inherits what. This process can be slow, expensive, and may result in outcomes that don’t reflect your true wishes. It can also leave your loved ones with unnecessary legal headaches.
How to Avoid It
Don’t wait for what you think will be the perfect time. A basic estate plan, which typically includes a will, power of attorney, healthcare directive, and possibly a trust, can be created with the help of an experienced attorney and updated as your life changes.
The Mistake
Estate plans aren't meant to be set and forgotten about. People often forget to revisit their documents after big life events like marriage, divorce, having children, or significant financial changes. As a result, outdated beneficiaries or instructions can cause major problems.
Why It Matters
If your ex-spouse is still listed as a beneficiary on your life insurance policy or retirement account, those designations often override what’s written in your will. That way, they may receive your assets unintentionally.
How to Avoid It
Review your estate plan regularly. Ideally this would be every few years and after any major life event. Keep your beneficiary designations current, and talk to your attorney if there are changes in your family, finances, or wishes.
The Mistake
Many people focus on what happens after they pass away, but they overlook planning for what happens if they become incapacitated during their lifetime. Without a durable power of attorney or health care directive, no one has the legal authority to step in and manage your affairs if you can’t.
Why It Matters
If you become seriously ill or injured, your loved ones may have to go to court to be appointed as your guardian or conservator just to pay your bills or make medical decisions. This process is costly,
time-consuming, and emotionally draining.
How to Avoid It
Include a durable power of attorney for financial matters and a healthcare power of attorney or advance directive in your estate plan. These documents give someone you trust the ability to act on your behalf if you’re unable to make decisions yourself.
The Mistake
Creating a living trust is a great way to avoid probate and streamline the distribution of your estate, but it only works if you properly fund it. That means transferring ownership of your assets into the trust. Many people forget this step, leaving those assets subject to probate anyway.
Why It Matters
An unfunded trust is like an empty safe. You have a great container, but if nothing is inside, it’s not doing its job. If your trust isn’t funded correctly, your heirs may still face the delays and costs of probate court, even though you intended to avoid it.
How to Avoid It
Work with your attorney to ensure your trust is fully funded. This may include retitling real estate, transferring bank accounts, and updating beneficiary designations. It’s important to keep a record of what’s in the trust and review it periodically to make sure new assets are added.
The Mistake
Estate planning documents are only helpful if the right people know they exist and understand your intentions. Some individuals never tell their loved ones they’ve created a plan or where to find important documents when needed.
Why It Matters
If your family is unaware of your plan, they may miss critical steps or make decisions that go against your wishes. This lack of communication can also lead to disputes, delays, and unnecessary stress during an already difficult time.
How to Avoid It
Have an open conversation with the people involved in your estate plan, including your executor, trustee, and agents under your power of attorney. Let them know what to expect, what their roles are, and where your documents are stored. While you don’t need to share every detail, clarity now can prevent confusion later.
Final Thoughts
Estate planning doesn’t have to be complicated, but it does need to be done carefully. Avoiding these five common mistakes can help ensure that your wishes are carried out smoothly and that your loved ones are protected. Whether you’re just starting or updating an existing plan, working with a qualified estate planning attorney can make all the difference.
At Leydorf Law Firm, we help individuals and families create customized estate plans that reflect their unique goals and values. Contact us today to schedule a consultation and take the next step toward peace of mind.
