The Top Mistakes People Make When Planning Their Estate

Estate planning might sound boring or complicated, but it’s really just about deciding who gets your property and money after you’re gone. It’s a big deal, and many people mess it up without meaning to. Here are some of the most common mistakes in setting up an estate plan, and why fixing them matters.

First, a ton of people don’t even make a plan. They think, “I’m young,” or “I don’t have much,” so they skip it. But if you don’t write a will or set up a trust, the government decides who gets everything. That could mean your favorite cousin gets nothing, and some random relative you barely know gets it all. Plus, it can take longer and cost more for your family to sort out. According to the American Bar Association, over half of Americans don’t have a will, which is why this happens so often. Even something as simple as a power of attorney can allow you to sell things owned by you and your spouse even after your spouse becomes incapacitated. What if your spouse becomes incapacitated without a power of attorney? You have to go to court to appoint a guardian before any property can be sold.

Second, some people write a will but then forget to update it. Life changes—like marriage, children, divorce, or even disability—happen all the time. One study found that 1 in 3 people don’t update their will after big life events, which can lead to surprises no one wants. Check your plan every few years to make sure it still fits your life.

Another big mistake is not picking the right person to handle things. You need someone you trust to follow your wishes, called an executor. If you pick a flaky friend who can’t even show up on time, they will probably mess things up. Or if you don’t tell them they’re in charge, they won’t know what to do when the time comes. Picking the wrong executor is one of the top reasons estate plans fall apart.

People also forget about taxes and debts. You might want your kids to get your house, but if you owe money, it may get sold to pay that off first. And then, there are estate taxes—which can take a big chunk of higher-value estates if you don’t plan ahead.

Finally, a lot of people don’t tell their family about the plan. Imagine your kids fighting because they don’t know what you wanted. It’s not fun, and it happens more than you’d think. A survey by Caring.com showed that only 4 out of 10 people talk to their family about their estate plans, leaving most in the dark. Letting your loved ones know where your papers are and what’s in them can save a lot of headaches later.

Estate planning doesn’t have to be scary. Avoiding these mistakes can make sure your stuff goes where you want, without extra stress for the people you care about. It’s worth taking the time and care to get it right.

References:

American Bar Association - "Why You Need a Will" (www.americanbar.org)

IRS - "Estate Tax Basics" (www.irs.gov)

Caring.com - "2023 Estate Planning Survey" (www.caring.com)

LegalZoom - "Estate Planning Statistics" (www.legalzoom.com)