Avoiding Common Mistakes in Estate Planning

Avoiding Common Mistakes in Estate Planning [Tips & Checklist to Help You Avoid Them]

200-Level (Intermediate) | Estate Planning | Relationships & Money  August 23, 2021

We all make mistakes, some big, some small. The good news is we can learn and recover from most if not all of them before it’s too late.  When it comes to family, finances, and medical care in terms of estate planning, people make several frequent errors.

These often made blunders include not having an advance health care directive or powers of attorney, failing to name a guardian for minor children, not titling real estate correctly, and forgetting to name or update a beneficiary on a life insurance policy, retirement plans, or other financial accounts after major life events.

Below you’ll find an excerpt from our new book Estate Planning 101, with 20+ common estate planning mistakes and tips to avoid them (plus an estate planning checklist to keep you on track). Being aware of these often made missteps or omissions will help you do proper planning, and steer clear of them-or identify any you’ve already made. If you can raise your hand for any, it’s time for corrective actions.

Whether you’re 18 or 118, you need at least some basic estate planning documents. Prioritize the essentials of an estate plan as a part of your overall life plan.

Learn from others’ errors, so you don’t make any yourself. Or at least have time to fix any already incurred. Before it becomes too late.

Tips for Getting It Right the First Time

An estate plan that’s full of mistakes might cause more harm than good. Make sure you read all legal documents thoroughly and correct any errors you find before signing them.

Misspelled names or incorrect addresses, accidentally omitting an heir, or gifting the wrong asset to a beneficiary can happen. While you can easily fix those types of mistakes when caught, they may cause lots of grief when they’re not.

Common Mistakes in Estate Planning

Here is a list of frequent estate planning mistakes people make, followed by a checklist to use when doing yours. While neither is an exhaustive list, they can help you avoid errors and track necessary steps as you strategize and put your plan into play.

• Not planning at all! You’re headed in the right direction by reading this book. Now you need to put in the work.

• Planning but not implementing. Without a will, power of attorney, and advance directives, your state determines who manages your affairs and how your property’s distributed. To have your final wishes known and followed, create those legal forms at a minimum.

• Not doing any other financial planning. Estate planning is just one part of a more extensive financial planning process. Not putting time and effort into other areas could put your finances at risk.

• Focusing too narrowly on individual assets. Because specific items in your estate vary over time, consider leaving heirs a percentage of your estate’s value instead of giving them assets individually. This eliminates the need to revise your will every time significant investments change.

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