Do you know that estate planning can also fail if it’s not done properly? Yes, estate planning can fail. What could be the consequences? So after your death, the beneficiaries, executors, and everyone will be in trouble.

It usually happens when someone makes mistakes like naming only one beneficiary, not including digital assets, etc. Regardless of the error, the consequences can be severe, potentially preventing the estate from being distributed as intended.

If you don’t want this to happen in your case, this article will help you out. Below, we’ll explain the common mistakes people make with estate planning and also offer solutions. By following these tips, you can avoid such mistakes.

10 Common Estate Planning Mistakes To Avoid

Let’s jump into the main part of the article, which consists of the 10 common mistakes to avoid while planning an estate. We’ll first explain the problem and then provide a solution to help safeguard your estate planning efforts.

1. Incomplete Estate Planning

Incomplete estate planning means having only a Will without considering other crucial aspects. While a Will outlines property distribution, it may not address scenarios like hospitalization or childcare arrangements.

Solution: The simple solution is to contact a professional estate planning lawyer. They’ll guide you about all the aspects you should look at, like family, future health conditions, financial decisions, and appointing children’s guardians to create a foolproof estate plan.

2. Selecting An Inappropriate Executor

The second common mistake we’ve seen people making is they choose inappropriate executors. It means a person who lacks responsibility, time, or effective communication skills that can easily prolong the estate distribution process.

Solution:

Always select responsible executors who are good at communication and dedicate time to implement the will. Consider nominating two executors so they can both divide the responsibilities and perform all tasks efficiently.

3. Limiting Beneficiary Choices

No doubt it’s important to be specific in estate planning, but being specific doesn’t mean nominating only one beneficiary. Opting for a single beneficiary restricts your options, and if that beneficiary passes away before the probate process concludes, complications can arise.

Solution:

You can nominate more than one beneficiary, like the primary one, and then the contingent beneficiaries who’ll be the second choice. The contingent beneficiaries inherit assets only if the primary beneficiaries die or choose not to accept the estate.

4. Overlooking Digital Assets

Many people forget to add digital assets to their estate planning, which is a big mistake. This results in the distribution of assets among all beneficiaries according to the intestate succession law rather than the choice you would have preferred if you had been alive.

Solution:

Include all digital assets, such as cryptocurrency, social media accounts, and content royalties, in your Will, specifying who inherits what. This prevents future conflicts and ensures your assets go to the intended beneficiaries.

5. Failing To Plan For Future Needs

Another mistake we’ve noticed in estate planning is neglecting to address future needs. For example, addressing questions like who will make financial and healthcare decisions on your behalf if you’re unable to.

Solution: 

Create both financial and healthcare powers of attorney for future needs. By doing so, you entrust these critical decisions to someone you trust. This will ensure your affairs are managed according to your wishes.

6. Forgetting Charitable Contributions

People often forget to add details about the assets they want to donate. If you’ve set aside assets or funds specifically for charitable purposes, it’s essential to include them in your estate planning after consulting with a lawyer about the tax implications.

Solution: 

You can either nominate the charitable organization in the Will or create a charitable trust. It’s also possible to name the organization as the beneficiary of the life insurance policy, retirement account, stock, or other assets.

7. Not Planning For Disabled Dependents

Estate planning is crucial when you have disabled dependents in the family, such as children, spouses, or parents. Simply leaving assets to them without appointing a guardian can leave them vulnerable and susceptible to potential scams.

Solution: 

Appoint a trustworthy guardian for your disabled dependents. This guardian will make financial decisions on their behalf, ensuring their assets are managed responsibly and safeguarding them from potential exploitation.

8. Ignoring Funeral Instructions

Although it’s not obligatory, you should also consider leaving instructions about your funeral in estate planning. This will solve a lot of problems and conflicts that can happen in the future after your death.

Solution:

Discuss with your estate planning lawyer to create a detailed document outlining your funeral wishes. You can also include whether you’re a registered organ donor and give consent for organ donation to help people in need.

9. Overlooking Estate Tax Implications

You may not know, but the amount of assets you want to give to the beneficiaries can be lower than expected. Executors also pay taxes before the estate is distributed among all the beneficiaries. This is why it’s important to consult a lawyer about the tax implications.

Solution: 

Estate tax isn’t applied to every estate but only to those whose value exceeds a certain amount ($13,610,000 as of 2024). If your estate surpasses this amount, seek advice from a lawyer to explore ways to minimize taxes and understand your options.

10. Drafting An Online Will Without Expertise

A common error in estate planning is relying solely on online tools to create a Will. No doubt, online Will generators are quite helpful, but they may not account for all legal nuances, leading to potential mistakes if you’re not well-versed in estate law.

Solution:

Conduct thorough research on how legal experts draft Wills and review available templates online to get an idea. After drafting your Will, double-check for accuracy, ensure it’s witnessed, and don’t forget to sign it before finalizing.

Final Words

Well, that’s all! We hope you’ve got the answer to the common mistakes people make with estate planning. We’ve explained the top 10 common mistakes that mostly happen and become the reason for a failed estate plan.

You can read the solutions along with the mistakes mentioned above. If you need further assistance, don’t hesitate to reach out to our estate planning lawyers. We offer complimentary consultations to discuss cases with our legal team.