Common Estate Planning Mistakes and How to Avoid Them

17 September 2025

Estate planning—it's one of those topics that many people put off, thinking they have plenty of time. After all, no one enjoys contemplating the inevitable. But here’s the deal: failing to plan properly can create chaos for your loved ones down the road.

The harsh reality? Many people make critical mistakes when setting up their estate plans, leaving their assets vulnerable to unnecessary taxes, legal headaches, and even family disputes. But don’t worry—I’ve got you covered. In this guide, we’ll break down the most common estate planning mistakes and, more importantly, how you can avoid them.

1. Not Having an Estate Plan at All

Let’s start with the most obvious mistake: not having an estate plan in place. You’d be surprised how many people—young and old—skip this crucial step, thinking they don’t own enough assets to worry about it.

But estate planning isn’t just for the ultra-rich with mansions and investments. Whether you own a house, have savings, or even sentimental valuables, you need a plan. Without one, the state decides who inherits your assets, and trust me, that process can be messy and expensive for your loved ones.

✅ How to Avoid This Mistake:

- Start now, no matter your age or financial situation.
- Work with an estate planning attorney to draft a will and consider other documents like a trust and power of attorney.

2. Failing to Update Your Estate Plan

A will isn’t something you draft and forget about forever. Life changes—marriages, divorces, births, deaths—can all impact how your assets should be distributed. Yet, many people fail to revisit and update their estate plans after major life events.

Imagine this: You wrote your will 10 years ago when you were married to your first spouse. Now you’re remarried, but your ex is still listed as the main beneficiary. Guess who gets your assets if something happens to you? Yep, your ex.

✅ How to Avoid This Mistake:

- Review your estate plan at least every 3-5 years or after major life events.
- Update your will, trusts, and beneficiary designations on insurance policies and retirement accounts when necessary.

3. Not Naming a Contingency Beneficiary

A beneficiary is the person who inherits your assets when you pass. But what happens if your primary beneficiary dies before you or is unable to inherit? If you don’t name a backup (contingency beneficiary), your assets could end up in probate court—a long and expensive legal process.

Let’s say you name your only sibling as your beneficiary, but they pass away before you. If there’s no contingent beneficiary listed, the state may step in to decide who gets your assets, which could delay the process and cause disputes among surviving relatives.

✅ How to Avoid This Mistake:

- Always name at least one contingent beneficiary in your will, life insurance policies, and retirement accounts.
- Review and update your beneficiaries periodically.

4. Overlooking Digital Assets

We live in the digital age, yet many people forget to include their digital assets in their estate plans. Think about your online banking accounts, social media profiles, email accounts, and even cryptocurrency holdings. If you don’t make a plan for them, your loved ones might struggle to access or manage them.

✅ How to Avoid This Mistake:

- List out your digital assets, including passwords, in a secure document or password manager.
- Name a digital executor in your estate plan to handle your online accounts.

5. Not Planning for Disability or Incapacity

Estate planning isn’t just about dividing up your assets after you pass—it’s also about making sure you’re taken care of if you become incapacitated.

Without a power of attorney and a healthcare directive, your loved ones might need to go through a lengthy legal process to make decisions on your behalf. It’s like locking your family out of the control room when they need to act quickly.

✅ How to Avoid This Mistake:

- Set up a financial power of attorney to allow a trusted person to manage your assets if you’re unable to.
- Create a healthcare directive (living will) to outline your medical wishes.

6. Underestimating Estate Taxes

Estate taxes can take a serious bite out of the wealth you leave behind. While federal estate taxes typically apply to large estates, state estate taxes can affect many people with moderate wealth. If you don’t plan accordingly, your heirs may end up paying more than necessary.

✅ How to Avoid This Mistake:

- Work with a financial planner or estate attorney to explore tax-saving strategies like gifting, trusts, or charitable donations.
- Consider setting up an irrevocable trust to protect certain assets from excessive taxation.

7. Making Children or Young Adults Sole Beneficiaries

Leaving a large sum of money to a teenager or young adult might seem like an act of love, but it can backfire. Could you imagine handling a huge inheritance at 18 years old? Many young heirs end up spending recklessly or becoming targets for financial predators.

✅ How to Avoid This Mistake:

- Set up a trust with age-based distributions (e.g., they receive funds at 25, 30, and 35).
- Appoint a trustee to manage the inheritance until the child reaches a responsible age.

8. Not Considering Long-Term Care Costs

Aging comes with its own set of financial burdens—one of the biggest being long-term care. Nursing homes and assisted living facilities can cost thousands per month, depleting your estate rapidly if you haven’t planned ahead.

✅ How to Avoid This Mistake:

- Look into long-term care insurance to help cover potential healthcare expenses.
- Consider Medicaid planning, which can help protect assets from being spent down on nursing home care.

9. DIY Estate Planning Without Professional Help

With so many online templates available, some people are tempted to DIY their estate plans to save money. But estate laws can be complicated, and a simple mistake—like incorrect wording—can render your will invalid. A one-size-fits-all template often doesn’t cover the complexities of your unique situation.

✅ How to Avoid This Mistake:

- Consult an estate planning attorney to ensure your documents are legally sound.
- If you choose to use an online tool, at least have a professional review it.

10. Choosing the Wrong Executor or Trustee

Your executor (or trustee) is the person who carries out your wishes after you pass. Choosing the wrong person—someone who is disorganized, emotional, or unreliable—can create delays, disputes, and extra costs.

✅ How to Avoid This Mistake:

- Pick someone who is responsible, trustworthy, and financially savvy.
- Consider naming a backup executor in case your first choice can’t serve.

Final Thoughts

Estate planning isn’t just for the wealthy or the elderly—it’s for anyone who wants to protect their family and their assets. By avoiding these common mistakes, you can ensure that your hard-earned money goes to the right people, in the right way, without unnecessary legal hurdles.

So don’t put it off any longer—start planning today. Your future self (and your loved ones) will thank you.