top of page

Common Estate Planning Mistakes to Avoid

One major problem with planning for one’s passing and financial distribution is that people frequently leave the matter to the very last minute and then make rushed decisions with bad information. No surprise, common mistakes occur that are oftentimes very avoidable with a bit of planning and thinking a bit earlier. Every financial advisor will quickly say a good financial portfolio includes planning for one’s estate distribution after one passes. Still, it can frequently sound like a foreign language to others unfamiliar with estate planning.

Assuming one can dedicate some time to planning and work a bit sooner than the very last minute, avoid major mistakes many estate plan packages often have:

Building an estate plan

1. Have a Plan

It’s an absolute train wreck for your family and estate not to have some plan in place at all. Even a simple will is far better than completely nothing. Ignoring the matter means that a probate court will decide your entire estate. And that means the judge involved could transfer your assets to just about anyone who makes a good argument in the required probate hearing.1 Do everyone a favor and at least prepare a basic will designating a default beneficiary for all your assets if nothing else. While many assume their spouse will take over everything, consider point two below, a common occurrence.

2. Think Beyond a Single Beneficiary

Don’t assume the first party designated as a beneficiary will be around by the time your estate plan takes effect. Life happens and doesn’t stay frozen in time just because an estate plan designates one specific person as a key beneficiary. Go a second or third layer deeper as a contingency if the first person chosen is no longer available and choose one or two more. You will be making your executor’s task much easier to do getting your assets distributed properly.

3. Regularly Update Your Will, Estate Plan, or Trust

If you already have a will, estate plan, or trust, ensure it is regularly updated. Your financial situation and universe of beneficiaries is regularly changing and oftentimes growing.1 Big changes that should be adjusted for include new children joining a family, inheritance of assets from someone else, changing large assets such as homes and cars, and designating inheritance of new financial accounts (bank accounts, brokerage accounts, investments etc). Not updating regularly means that when the plan is needed, it may not match or apply to extra assets gained after the fact or new beneficiaries not previously identified being left out.

4. Think About Your Own Health

People don’t think about their health when they plan an estate. Very often, a surviving spouse may need health support, or your own condition may trigger a disability. These translate into costs that have to be addressed for medical services. Not having a clear path for power of attorney and health directives can be big issues if someone needs to make health decisions for you. Again, plan ahead and anticipate these challenges with solutions.

5. Transferring Assets as a Gift

An easy way to transfer assets early without taxes is a gift, but people hardly use it while alive. Any individual can transfer up to $14,000 without taxes on the amount or value annually to any other individual.2 This is an easy, simple way to liquidate parts of an estate early without the transfer going through the estate distribution process after a person dies. Even better, you are entirely in control of the asset and transfer instead of relying on an executor.

6. Choose an Executor

Choose an executor who can manage your estate, which includes a lot of paperwork and legalities.3 People frequently choose a sibling or a close relative to execute an estate. However, that doesn’t mean the person has the fortitude to do the job. Choose someone with the maturity and backbone willing to deal with the challenges involved, including appearing at hearings and fending off relatives.

Invest In a Life You Love,

Donovan Carson - founder of Carson Capital



When You're Ready, There Are Three Ways I Can Help You

  • Become a Client—Apply to become a client of mine and partner 1:1 in building and executing your shortest path to enduring financial freedom. Receive ultra-high-net-worth service regardless of whether you're building your first million or already have millions.

  • Master Money In Minutes—Get immediate clarity and expert advice with focused, action-oriented money courses inspired by my journey to millions and my work with high-net-worth clients. (50% off your 1st-course w/ code: FREEDOM)

    • Build an Automated Cashflow System that Actually Works and Can Be Managed In Minutes Each Month

    • Build a Bulletproof Estate Plan: Expert Guidance and a Platform to Build, File, and Manage Your Estate Plan

    • Get Organized. Stay Organized. Finally, a financial organization system that works and can be easily managed. (Bonus: annual checklist to purge what you don't need and organize what you do)

  • Follow Me on LinkedIn for daily tactics, tips, and inspiration.

3 views0 comments


bottom of page