10 Estate Planning Mistakes and How To Avoid Them

It is our hope that by being aware of these avoidable estate planning mistakes, you can avoid significant inconvenience, stress, expense, and disappointment.

Estate planning mistakes are common. While everyone has varied needs and desires, it can universally be said that the failure to plan for matters related to incapacity or death is in effect planning to fail.

GeauxPlans works with people in all ages and stages of life. More often than not, we see people who have made well-intentioned mistakes with their estate planning. It is our hope that by being aware of these common estate planning mistakes, you can avoid (or help your loved ones avoid) significant inconvenience, stress, expense and disappointment.

So, here are 10 of the most common estate planning mistakes to avoid:

#1: Failing to Plan While You Can (Procrastination) is One of The Biggest Estate Planning Mistakes

Knowing isn’t enough. You have to ACT! Procrastination is the silent killer of estate plans.

  • Assess your needs
  • Create what’s missing
  • Tie it in with your life

Estate planning is the most important thing you can do to ensure everything you own and everyone you love will be protected. Procrastination is natural, but that’s what gets us in trouble.

Ready to start? Let’s Geaux!

10 Estate Planning Mistakes and How To Avoid Them

#2: Failing to Maintain Your Estate Plan

Everything changes and so must your estate plan – or eventually it will fail.

  • Family
  • Finances
  • Health
  • Law

All these things are subject to change. We recommend that you review your estate plan annually, or at any life changing event to ensure you remain “all set.”

Unlike other online estate planning platforms, Geauxplans is owned and maintained by an estate planning law firm, which makes maintaining your estate plan easy and affordable.

Subscribe to our Legal Edge Plan to avoid one of the most common estate planning mistakes.

#3: Choosing the Wrong Online Estate Planning Platform

Online estate planning forms are like a box of chocolates. You never know what you are going to get until it’s too late. Beware of forms obtained from any source other than an estate planning law firm.

Don’t take our word for it, though. Listen to this Judge’s comments about computer-generated Will:

“[The] will appears to be computer generated and prepared by a lay person. Regardless, the requisites of law still apply. Even though the result will be harsh, the Court is bound to follow the law applicable to and governing such instruments. The Court is a court of law and not of equity.”

In re Succession of Biscamp, 211 So. 3d 472 (La. Ct. App. 2017)

GeauxPlans is owned and operated by an estate planning law firm. GeauxPlans documents are used by licensed estate planning lawyers in the actual practice of law. These essential attorney-grade legal forms are made available through GeauxPlans at a fraction of the cost.

Choosing GeauxPlans for online estate planning avoids one of the biggest estate planning mistakes.

#4: Failure to Coordinate Non-probate Assets and Over-use of “Pay on Death” Accounts

A will or trust does not control the disposition of assets that are governed by beneficiary designation, like:

  • Life insurance
  • Annuities
  • Retirement accounts
  • “Pay on death” accounts

These “non-probate” assets must be coordinated with the entire estate plan to avoid unintended results and provide estate liquidity, where necessary. Testamentary intent can easily be frustrated by failing to take into account non-probate assets. One of the biggest estate planning mistakes we can make is failing to properly integrate non-probate assets.

#5: Failure to Plan for Blended Families and Other Contingencies, Such as People Dying “Out of Order”

“I won’t have any trouble with my spouse’s kids if they die. I get along great with my step-children.” Please, don’t count on it!

Probate tends to bring out unresolved issues and undesirable character traits in most people. Unpleasant dynamics emerge even in the closest of families.

Estate planning documents should cover contingent situations such as:

  • A predeceasing spouse or child
    • Make clear provisions for a surviving spouse. Avoid putting a surviving spouse in a negotiating position with children.
    • If minors or incapacitated persons inherit if someone dies out of order, establish a contingent minor’s or special needs trust. Always nominate guardians for minor children.
  • Tax laws changes
    • Even if your estate is under the current value threshold subject to Federal estate tax, it is always best to plan for that contingency.

Failing to plan for contingencies is one of the most common estate planning mistakes.

#6: Misuse of Revocable Living Trust Planning is One of The Most Common Mistakes in Trusts

A Revocable Living Trust can be a useful too, but is not a magic elixer. Proper funding of a Revocable Trust is vital and can be overlooked, which will defeat the purpose of a Revocable Trust in avoiding probate and is one of the most common estate planning mistakes.

Revocable Trusts can be useful for certain purposes, such as:

  • Avoiding the cost and administrative burden of probate
  • Preserving the characterization of assets
  • Avoiding ancillary probate in another state
  • Maintaining privacy
  • Minimizing disputes
  • Improved control over assets during a period of incapacity, or as part of a comprehensive asset protection plan

Revocable Trusts provide zero asset protection or tax benefits alone, but in conjunction with other devices, can be useful in toggling control or effecting a relatively quick transition of assets across state lines or into more protective entities.

A full understanding of the benefits and limitations of a Revocable Trust is recommended before engaging in revocable trust planning.

#7: Failure to Consider the Impact of Community Property Laws

All property is presumed to be community property if you live in a community property state, unless there is legal proof of separate property status. This is true even if the property is held in the name of only one spouse. This can dramatically impact an estate plan and is one of the most common estate planning mistakes.

  • Surviving spouses can be left destitute.
  • Children can be effectively disinherited.

Disputes regarding the character of property are common and expensive. Failure to consider, change, or preserve the character of property is one of the more common estate planning mistakes that can disrupt the best laid estate plan.

#8: Failing to Plan for Potential Incapacity Is One of The Most Common Estate Planning Mistakes

A Durable Financial Power of Attorney will allow you to select a person to make financial decisions if you become incapacitated.

A Durable Medical Power of Attorney will allow you to select a person to make medical decisions if you become incapacitated.

An Advance Healthcare Directive (a/k/a Living Will) will allow you to make important end-of-life decisions regarding the continuation of life support.

Failure to have these documents in place before an event of incapacity often requires an expensive court proceeding to appoint a guardian or curator, or a “right to die” contest. You can create Powers of Attorney and a Living Will for you or a loved one right now with GeauxPlans! Check out our Power of Attorney Plan.

#9: Putting a Child’s Name on a Deed or Account

If you need to divest yourself of assets for some reason, such as asset protection planning, create a plan that allows you to maintain control of your assets. Assets transferred to a child during life are subject to their risks, such as divorce, death, bankruptcy, or other claims. This puts your financial security at risk, so avoid this common estate planning mistake.

You also leave money on the table with a direct gift to a child. A child will not receive a step-up in tax basis for any asset received as a lifetime gift, triggering taxable income if the asset is later sold by the child. Conversely, assets received by way of an inheritance or the right kind of trust receive a step-up in tax basis, which means the asset can be sold
tax-free.

#10: Not Meeting with an Estate Planning Attorney is One of the Worst Estate Planning Mistakes

An experienced estate planning attorney can provide you with strategies based on your particular circumstances, including advanced needs such as Asset Protection.

GeauxPlans is owned and maintained by an estate planning law firm and every GeauxPlan is backed by a Triple Guaranty, one of which is a complimentary meeting with an estate planning attorney (see No. 2, below). One of the worst estate planning mistakes we see is not taking advantage of the complimentary consultation.

1. Free Changes for 30 days

Any changes to your GeauxPlan within the first thirty (30) days are free!

2. Free Strategy Session with an Estate Planning Attorney

You are entitled to a complimentary meeting with an affiliated estate planning attorney to discuss any issues or concerns you may have regarding your estate plan within thirty (30) days after starting your GeauxPlan.

3. 100% Credit of Your GeauxPlans Fee

You will receive a 100% credit of your GeauxPlan fee towards an attorney-prepared estate plan with an affiliated Louisiana estate planning law firm at any time within the first year, which means you can test drive your GeauxPlan for an entire year!

Remember that knowing isn’t enough. You have to ACT!

Ready? Let’s Geaux!

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10 Estate Planning Mistakes and How To Avoid Them

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#1 Choose Your State

If you spend time in more than one state, use the state where you are registered to vote, or maintain a driver's license, or intend to return if you are temporarily residing in another state.

#2 Are you married?
#3 Do you want to plan for what happens when you die?

You get to decide who's in control after you die, who gets your assets, and when, as well as who cares for children, etc.

#4 Do you own any real estate in the state of Louisiana?
#5 OK, so probate will be required in Louisiana. It's a bit more work, but do you want to avoid the probate process by transferring your assets to a Living Trust?

GeauxPlans can walk you through the process - step by step.

#5 Do you own probate assets worth more than $125,000?

Probate assets include property that passes by beneficiary designation or that isn't already in a trust. Put another way, probate assets do not include life insurance or annuity proceeds (unless your estate is the beneficiary), retirement assets, usufruct or life estate property, and other assets with named beneficiaries, such pay on death accounts.

#6 Do you have any minor children?

Include both biological and legally adopted children.

10 Estate Planning Mistakes and How To Avoid Them
10 Estate Planning Mistakes and How To Avoid Them
10 Estate Planning Mistakes and How To Avoid Them
#4 If you lose capacity, do you want someone you trust to make financial or healthcare decisions for you?

Incapacity can result from any of the following:

  • Accidents
  • Injuries
  • Medical conditions
  • Degenerative diseases
  • Anything that can cause you from acting on your own behalf, whether temporarily or permanently

If something happens to you, someone should be able to make medical and financial decisions for you, like taking care of bills and other financial obligations, consenting to medical procedures, making care arrangements, and accessing proctected health information.

10 Estate Planning Mistakes and How To Avoid Them
#5 Do you need authority to make financial or medical decisions for another person?

For example, a college student who is no longer a minor, or an elderly person (perhaps a parent) may need assistance with financial or medical decisions.

#6 Do you seek privacy or improved control of your assets during life?

For example, do you wish to:

  • Minimize or avoid any public record or information about personal assets?
  • Shield any public information from creditors or predators?
  • Keep assets segregated as separate property in the event of a second marriage?
#7 It sounds like you need some advice.

GeauxPlans is owned and administered by an estate planning law firm. If you have questions or would like a complimentary consultation, please submit your inquiry.

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