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Do this, Not that with your Estate Plan

Save loved ones time and money

Final wishes and directives are commonly littered with errors. We all have a vision for how things will play out during life and beyond. It's all too often that things don't happen the way they should or were intended to happen. Just about every year we read the headlines of an article containing issues with a will or lack thereof for celebrities and high-profile millionaires. It sounds like things could be fixed so easily. Why not just make an appointment with a trusted attorney and button things up? It's not that simple when you involve children, previous marriages, substantial wealth, disabled beneficiaries, and multiple parties. In our line of work, we see estate plans set up, changed, updated, and modified tons of time throughout our client's retirement years. Life isn't that simple and when it comes to money and "stuff", people can get very particular about how and when things are distributed to their heirs.

Estate planning is an important part of financial planning, ensuring that your assets are distributed according to your wishes after your death. However, many people make common mistakes when creating an estate plan. These mistakes can lead to confusion, conflict, and even legal challenges for your family. This happens all the time and if you think cute, little Suzy would challenge my will or argue with her cousins about money, think again. Money changes people and we've experienced it bring out the worst in families.

With that said, what are examples of the most common mistakes we find in estate plans?

1. Not Having an Estate Plan

The biggest mistake you can make is not having an estate plan at all. Sounds crazy, but this has to be one of the most common issues we find. If you die without a will, the state will decide how your assets are distributed, which may not align with your wishes. Imagine that for a minute - the state making decisions about your hard-earned money. Uhm, no thank you. This can also lead to lengthy and expensive probate proceedings for your loved ones.

2. Not Naming Contingent Beneficiaries

When you name beneficiaries for your assets, it's important to also name contingent beneficiaries. These are people who will receive your assets if your primary beneficiaries predecease you. They only come into play when primary beneficiaries die before you do. There are more distinctions to make about when contingents are involved, but that requires more dialogue with your advisor and attorney. For now, it's important to know that contingent beneficiaries are just as important as primary beneficiaries. Without contingent beneficiaries, your assets may not pass to the people you want them to go to.

3. Not Planning for Disability

We all think we're invincible and have the ability to escape death and we're certainly never going to become disabled. Statistics show that people have a higher chance of becoming disabled versus dying by the time they reach age 65. Estate planning should not only address your death but also your potential disability. If you become incapacitated, you need to have someone in place to make decisions on your behalf. This can be done through a power of attorney for finances and a healthcare power of attorney.

4. Not Pre-planning for Nursing Home Care

Nursing home care can be very expensive, and it can quickly deplete your savings. If you have assets that you want to pass on to your heirs, it's important to pre-plan for potential nursing home care. This can be done through various strategies, such as Medicaid planning.

5. Putting Your Child's Name on the Deed to Your Home

Adding your child's name to the deed of your home may seem like a simple way to ensure they inherit your property, but it can have unintended consequences. It may be the right thing depending on your scenario, but it's certainly not for everyone. Doing so can subject your home to your child's creditors, and it can also make it more difficult for you to sell the home. Ouch!

6. Choosing the Wrong Person to Handle Your Estate

The person you choose to be your executor or trustee is responsible for carrying out the terms of your estate plan. Choose someone you trust who is capable of handling the job. Don't forget to update them as time goes on and friends and family around our age can often pass away before us.

7. Not Reviewing Your Estate Plan Regularly

Your estate plan should be reviewed regularly to make sure it is still up to date with your wishes and your circumstances. Life changes, such as marriage, divorce, or the birth of a child, may necessitate changes to your plan. We typically recommend doing this once a year along with a thorough assessment of your healthcare benefits and retirement plan updates. It shouldn't take long, but it's worth it to take a look.

8. Forgetting About Your Digital Assets

In today's digital age, your assets include more than just physical property. Don't forget to include your digital assets, such as online accounts, social media profiles, and cryptocurrency, in your estate plan. Yes, cryptocurrency. These types of assets are growing in popularity and can make it a nightmare for your beneficiaries to find after your demise. The shift to online statements and digital assets can make them vanish, never to be found if this isn't handled. We've even encountered people who have a plethora of online accounts scattered everywhere, making it difficult to produce a net worth statement while they're alive. Imagine an executor trying to piece it all together.

9. Not Considering Taxes

Estate taxes can be a significant burden on your heirs. It's important to work with an estate planning attorney to minimize your potential tax liability. Think retirement and distributions. It's often thought that you could outlive your assets in retirement and will deplete your retirement accounts. We're encountering more of the opposite. People don't need as much as they thought and they're often meeting with us to come up with a more tax-friendly plan for their retirement assets to be left to their beneficiaries. Taxes is a crucial part of planning and cannot be overlooked!

10. Not Communicating Your Plan to Your Beneficiaries

Once you have an estate plan, it's important to communicate it to your beneficiaries. This will help them understand your wishes and avoid surprises after your death. Nobody likes surprises and being in charge of a loved one's estate is no different.


By avoiding these common estate planning mistakes, you can help ensure that your assets are distributed according to your wishes and that your loved ones are not left with unnecessary burdens. Please don't forget about this aspect of planning. Far too often we see final wishes and estate plans unfinished or worse, not started.

If you haven't checked out my PennyWise Financial Podcast, watch a look at a clip from our latest show with guest Kevin Johnson, Esq from Klafehn Heise & Johnson, PLLC from Brockport, NY. Scroll down to watch the entire episode. It's available on all major podcast platforms like Apple, Google Spotify, and YouTube.

👇Or click below to watch the full Episode

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