Estate planning is an important process, but many people make critical errors that can
lead to unintended consequences. One of the biggest mistakes is not having an up-to-
date will. Without a valid will, assets may be distributed according to state intestacy
laws, rather than the deceased’s wishes. It is important to review and update wills
periodically, especially after major life events like marriage, divorce, or the birth of a child.
Another common mistake is failing to name financial accounts and insurance policy beneficiaries. Many assets pass outside of probate if beneficiaries are named, so not designating beneficiaries can complicate estate settlement and leave assets vulnerable to creditors’ claims. People often fail to update beneficiary designations after life changes, leaving ex-spouses or other outdated beneficiaries on accounts. Not considering estate taxes is another oversight. Estates over a certain value may owe
estate taxes at the federal and/or state level. Strategies like gifting assets or using trusts
can minimize taxes, but people frequently do not consult an estate planning attorney
about tax planning. The result can be significant tax liabilities that reduce the assets passed to heirs.
Finally, failing to communicate plans with family members is an estate planning error.
Surprising heirs not only cause emotional turmoil but can lead to legal contests if
disgruntled relatives try to overturn the will. Simple steps like discussing plans ahead of time and explaining the rationale for decisions can mitigate potential conflicts.
Estate planning is complicated, so mistakes are common. However, consulting an estate
planning attorney and keeping plans up to date can avoid many pitfalls that foil an
individual’s last wishes. Taking the time to plan properly helps ensure assets are preserved and distributed according to your intentions.
Please reach out to us at A Business Law Firm, LLC in Spartanburg, SC at (864) 699- 9801 so we can answer any questions you may have.
