30 April 2019

5 Common Estate Planning Mistakes and How to Avoid Them


Since estate planning involves thinking about death, many people put it off until their senior years or simply ignore it all together until it becomes too late. This kind of unwillingness to face or plan for reality can create major hardship, expense, and mess for the loved ones and assets you leave behind.


While not having any estate plan is the biggest estate planning blunder you can make, even those who do create a plan can run into trouble if they don’t understand exactly how estate plans function.


Here are some of the most common mistakes we see people make with estate planning:


1. Not creating a Will


While Wills aren’t the ultimate or only estate planning tool, they’re one of the bare minimum requirements. A Will designates who will receive your property upon your death and also names specific guardians for your minor children. Without a Will, your property will be distributed based on your state’s intestate laws (which are probably not in alignment with your wishes), and a judge will choose a guardian for any of your children under 18. Your kids will also inherit whatever you own outright, with no guidance, direction, or intention, as long as they’re over 18.


2. Not updating beneficiary designations


People often forget to change their beneficiary designations to match their estate planning desires. Check with your life insurance company and retirement-account holders to find out who would receive those assets in the event of your death.

If you have a trust, you’ll likely want the trust to be the beneficiary for most or all of your accounts, depending on the type of account. This does not happen automatically upon creating a trust. You actually have to make the changes. See the section below for more on funding your trust.


You also should not name a minor as a beneficiary of your life insurance or retirement accounts, even as the secondary beneficiary. If they were to inherit these assets, the assets become subject to control and supervision of the probate court until he or she turns 18.



3. Not funding your trust


Many people assume that simply listing assets in a trust is enough to ensure they’ll be distributed properly. But this isn’t true. Some assets—real estate, bank accounts, securities, brokerage accounts—must be “funded” to the trust in order for them to be actually transferred without having to go through court. Funding involves changing the name on the title of the property or

account to list the trust as the owner.                                           

Unfortunately, many lawyers have been trained to create a trust, but many do not assist clients to make sure their assets are actually transferred into the trust. Crazy, right?!? But we see it all the time. And of course, when you acquire new assets after your trust is created, you must make sure those assets are also titled into your trust. However, most law firms do not have a process to help clients so that new assets are added to the Trust properly.  +

Our law firm approach is different and that means we help you with the process of transferring your assets by helping you get them inventoried and titled properly.  With our process the inventory is maintained throughout your lifetime so your assets aren’t lost and do not get stuck in court upon your incapacity or death.


4. Not reviewing documents


Estate plans are not a “one-and-done” deal. As time passes, your life circumstances change, the laws change, and your assets change. Given this, you must update your plan to reflect these changes—that is, if you want it to actually work for your loved ones, keeping them out of court

and out of conflict.

We recommend reviewing your plan annually if possible, and at the very least, every 3 to 5 years to make sure its terms are up to date. You should also be sure to immediately update your estate plan following major life events like divorce, births, deaths, and inheritances. We’ve got built-in processes to make sure this happens—ask us about them.


Moreover, an annual life review can be a beautiful ritual that puts you at ease knowing you’ve got everything handled and updated each year.

5. Not leaving an inventory of assets

Even if you’ve properly “funded” your assets into your trust, your estate plan won’t be worth much if heirs can’t find your assets. Indeed, there’s more than $58 billion worth of lost assets in the U.S. in the form of unclaimed property right now. Can you believe that? And it happens because someone dies or becomes incapacitated but their assets cannot be found.

That’s why we create a detailed inventory of assets, indicating exactly where to find each asset, such as your cemetery plot or prepaid funeral package, bank and credit statements, mortgages, securities documents, and safe deposit box/keys. And don’t forget digital assets like social media accounts and cryptocurrency, along with their passwords and security keys.

Beyond these common errors, there are many additional pitfalls that can impact your estate planning. As your Personal Family Lawyer®, we’ll guide you through the process, helping you to not only avoid mistakes, but also implement strategies to ensure your true Family Wealth and legacy will continue to grow long after you’re gone.

This article is a service of The Law Offices of Casey D. Conklin, PLC, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session, ™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.