Common Estate Planning Mistakes

Common estate planning mistakes include failing to create a plan at all, neglecting to update beneficiary designations after major life events, failing to fund a living trust, forgetting to plan for potential incapacity, and choosing the wrong executor or trustee.

Omissions and Maintenance Pitfalls

• No plan at all: Leaving your      family without a will means state intestacy laws decide who gets your property.

• Set-it-and-forget-it: Failing to review documents every 3 to 5 years or after major life changes like divorce, marriage, or a birth.

• Ignoring incapacity: Omitting financial and medical powers of attorney leaves no legal voice for your care if you are hurt or sick.

Asset and Beneficiary Errors

• Mismatched beneficiaries: Forgetting that retirement accounts and life insurance policies override instructions written in a will.

• Unfunded trusts: Creating a      living trust but failing to transfer property or titles into it, which      renders the trust useless.

• No backup choices: Omitting contingent beneficiaries or successor trustees if your      primary choice passes away or cannot serve. 

Execution and Management Mistakes

• DIY documents: Using generic      online forms that may not meet your state's legal execution and witnessing laws.

• Wrong fiduciaries: Naming someone out of obligation rather than capability to manage your estate or trust.

• Hiding documents: Keeping vital paperwork locked away where your executor cannot find it in an emergency. 

• Elders adding kids to their bank accounts, place them in a trust and access funds with a power of attorney, you will avoid Medi-Cal Long Term Care eligibility issues and breaking gifting taxation limits.

• Elders often try to save the cost of making a trust by adding their kids to their deeds, exposing the kids to capital gains as they also gift their tax basis, rather that inheriting with a step up in basis