Estate planning is an essential component of preparation for a happy and secure retirement. Sadly, all too many Americans ignore estate planning altogether, imagining – somehow – that everything will work out magically for their heirs once they pass from the scene. In fact, those heirs are the ones who will have to clean up the legal and financial mess caused by their denial! 

Ignoring estate planning is one thing, but planning haphazardly can be even worse, as this recent article from Kiplinger explains. The problem is simple: you might be lulling yourself into a false sense of security, thinking you’ve taken care of everything, when in reality you may have inadvertently left out key elements of a solid plan. Like missing pieces of a jigsaw puzzle, these overlooked elements can spell the difference between a successful estate plan and one that creates unnecessary problems for those you love.  

If this topic sounds familiar, it should: we brought you a similar article here on the Blog late last year. But the lists of common estate planning errors featured in these two articles are actually different, so both articles are worth a look. 

In the Kiplinger article, freelance reporter Daniel Bortz offers his list of several common estate planning mistakes. Take a look and see which ones might apply to you. 

Estate Planning Can Upend the Best of Intentions 

“Estate planning mistakes can upend your best efforts to protect your family’s finances after your death,” Bortz begins. “Everyone can benefit from an estate plan, a process that entails getting your financial affairs in order so that your assets and possessions get passed on to the people or organizations you want to inherit them.” 

Having a comprehensive estate plan put in place does remove some of the emotional complexity from the grief of loss, but experts also recognize that the estate planning process can be challenging in itself. Bortz writes that this “may explain why two out of three Americans don’t have any estate planning documents, according to Caring.com’s 2023 Wills and Estate Planning survey of 2,483 adults ages 18 and older. And around a quarter of those without a will said they don’t ever plan on creating one.” 

Bortz provides the following eight common estate planning mistakes to avoid. Let’s take a look.  

Estate Planning Mistake #1: Procrastination 

We’ve all been guilty of putting off difficult tasks, especially when they deal with emotionally challenging topics, but Bortz advises everyone not to wait when it comes to putting together an estate plan.  

“You certainly don’t want to become incapacitated because of a health emergency, such as a stroke or heart attack, and lack an estate plan,” he writes. “Yet over 40 percent of Americans without a will said they plan on waiting for a medical diagnosis to create a will, the Caring.com survey found. So don’t wait to get your estate plan in order.”  

Estate Planning Mistake #2: Not Seeking Legal Advice  

While there are options for putting together an estate plan on your own, Bortz advises seeking the legal support and advice of an attorney to make sure that there are no errors or incomplete sections that could cause problems down the line. Doing it yourself can be a big mistake. 

He writes, “Generally, estate lawyers charge $200 to $2,000 for an estate plan, depending on the complexity of the client’s assets, according to Legal Match. (Many estate attorneys offer free initial consultations.) You can find an estate attorney in your area using an online directory such as Justia, Legal Match, or the American College of Trust and Estate Counsel (ACTEC).”   

Of course, the attorneys at Life Point Law also specialize in this type of legal planning. Visit our website or contact us for assistance. 

Estate Planning Mistake #3: Not Keeping Loved Ones Informed 

Discussing issues like death and asset allocation with your loved ones can be difficult, but Bortz urges communication and clarity at every stage of the process.   

“Sharing your estate plan with your family and heirs can help prevent confusion, conflict, and unnecessary stress in the future,” he writes. “Sit down with the relevant people and have an open conversation about your intentions.”  Few things leave heirs feeling more helpless than trying to deal with an estate where no one seems to know the intentions of the deceased. 

Estate Planning Mistake #4: Making Key Documents Inaccessible 

Safety is good, but if your documents are completely inaccessible then they won’t be of any use to anyone.  

Bortz writes, “Don’t keep your estate documents in a safety deposit box or other place that’s difficult to access. For good measure, provide copies of your estate plan to your appointed executor or trustee, a trusted family member, and your estate lawyer.”   

Estate Planning Mistake #5: Missing Key Documents 

The last thing you want in an estate plan is confusion. This can lead to disputes among your heirs after you pass, and no one wants that. Bortz urges that the following essential documents be included in your plan (we’ve included these verbatim from his article):  

Last will and testament. Often simply referred to as a “will,” a last will and testament outlines your final wishes and instructions for the distribution of your assets and the management of your affairs after you pass.  

Beneficiary designations. Make sure to assign [and update] beneficiaries for 401(k) and IRA accounts, pensions, and life insurance policies. 

Durable power of attorney for medical care. This appoints a person to make medical decisions for you, on your behalf, should you become mentally incapable of making them yourself. It often includes an advanced healthcare directive, which instructs your family and doctors to use or not to use life support.  

Durable financial power of attorney. This assigns an individual to manage your assets if you become incapacitated.  

Funeral instructions. Specify whether you’d like a burial or a cremation and the type of funeral service you want. 

Proof of identity. Gather your social security card, birth certificate, marriage and/or divorce certificate, and any prenuptial agreements.  

Deeds or loans for large assets. Collect this paperwork for homes, boats, and other big assets.  

Estate Planning Mistake #6: Overlooking Digital Assets 

So much of our lives are online nowadays, including our social circles and our financial records. These online footprints should be accounted for in your estate plan. 

“Many people forget to account for their digital assets, such as cryptocurrencies, social media accounts, cloud storage, and digital files when creating an estate plan,” Bortz writes. “Consider assigning a digital fiduciary in your estate plan who has the right to access your digital assets when you pass.”  

Estate Planning Mistake #7: Not Updating Your Plan 

Most estate plans are not “one and done” affairs. Bortz recommends that any life change may precipitate going back over the information in your plan and updating it.  

He writes, “Failing to review and revise your estate plan after major life events — a marriage, divorce, birth of children or grandchildren, or the acquisition of new assets — can lead to consequences, such as assets being passed to the unintended beneficiaries.”  

Estate Planning Mistake #8: Choosing the Wrong Executor 

The final piece of wisdom from Bortz may seem obvious, but carries important relational weight and careful thought: make sure that you choose an executor you can trust.  

He writes, concluding the article, “Choosing someone who may have a conflict of interest can lead to problems when it comes time for them to administer your estate. Select an individual (or individuals) who are unbiased, and get their permission before you assign them as an executor or trustee.” 

Breaking News: Rajiv’s New Book is Here! 

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.  

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read. 

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more. 

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.  

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone! 

(originally reported at www.kiplinger.com)