Common Estate Plan Mistakes That Can Ruin Your Legacy (and How to Fix Them)

Protect your legacy: learn common estate plan mistakes—from outdated beneficiaries and unfunded trusts to overlooked digital assets—and how to fix them.

You did the hard work of creating an estate plan, but drafting documents is only the beginning. An estate plan must be maintained and updated to protect your legacy, avoid probate headaches, and ensure assets pass to the right beneficiaries.

One of the biggest errors is failing to update your estate plan. Life changes—marriage, divorce, births, deaths and falling outs—can all alter your wishes. Review and update your plan after major life events to keep beneficiary designations, trusts and wills aligned with your intentions.

Designated beneficiaries often trump what’s in a will, so managing beneficiary listings on accounts like IRAs, 401(k)s, life insurance, brokerage and savings accounts is critical. If you’ve named an ex-spouse or a deceased person, update those forms. Experts recommend naming multiple beneficiaries and checking account types regularly to prevent surprises.

Naming a minor as a direct beneficiary is another common pitfall. Minors can’t legally manage large inheritances, and courts may appoint a conservator. Instead consider a trust: a trustee you choose can manage funds and set distribution ages or conditions, such as college graduation or stable employment.

A trust only works if it’s properly funded. Many people create a trust document and then forget to retitle assets or name the trust as account beneficiary. Inventory your real estate, vehicles, bank and brokerage accounts, gather deeds and titles, and transfer ownership or beneficiary designations to the trust to avoid probate and ensure your trust functions as intended.

Digital assets are increasingly important. From social media and cloud files to cryptocurrency and online businesses, your digital estate needs planning. Create an inventory, choose a trusted digital executor (it can be the same as your estate executor), and provide secure password access through a password manager or written instructions.

Prepare for incapacity with financial and healthcare powers of attorney. These documents let trusted people make decisions if you become unable to do so. Also review potential estate tax implications—know federal exemption thresholds and consult a professional if your estate approaches taxable levels.

Finally, document your final arrangements and wishes for end-of-life care, burial or cremation to spare loved ones difficult decisions. Regular reviews with an estate planning attorney will help you avoid these common mistakes and keep your estate plan bulletproof.

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