The Top 5 Client Mistakes in Estate Planning

Top 5 Client Mistakes in Estate Planning

John Strohmeyer lists the five biggest mistakes and misconceptions that people make when considering estate planning.



Mistake #1 – “I don’t need an Estate Plan because I don’t have an Estate.”

Many people think they don’t need an Estate Plan because they don’t have a sprawling mansion, a large amount of land, or expensive property. But having that stuff isn’t the reason to do Estate Planning. In fact, doing Estate Planning becomes even more important when you don’t have very much stuff, because without an Estate Plan, your family is going to waste time, effort, and money trying to tie up your loose ends no matter how much property you own. The Estate Plan is your chance to tell your family what property they’re looking for and where it’s located. Think of it less like Estate Planning and more like “stuff” planning.

Mistake # 2 – “My will includes my IRA and 401k.”

This statement is not true because a 401k and IRAs are what we call non-probate property. These are items that don’t follow the will. Specifically, a 401k and IRAs follow their own beneficiary designations. So, for example, if your 401k plan says your aunt gets the money, but your will says your spouse gets the 401k money, the 401k plan overrules your will and your spouse will not be entitled to that money. This could obviously cause an issue. So effective Estate Planning doesn’t just mean taking care of your probate property; effective Estate Planning includes appropriate planning for the beneficiary designations for your non-probate property.

Mistake #3 – “I don’t need to tell anyone about my Estate Plan. They’ll just figure it out.”

This is not necessarily true. While you don’t need to tell everyone all the details, you do want to make sure people know what they’re looking for and where to find it. You don’t need to let everyone know everything, but you do want to let anyone you put in charge, like your agents, executor, or trustee, know what their role is, what’s expected of them, and where to find your Estate Plan.

Mistake #4 – “I don’t need to do any planning because my situation isn’t complicated.”

“Complicated” isn’t really the reason we do Estate Planning. Commonly, most of our families have a fairly straightforward, general plan, many of which look very similar. Often, our families say “leave it all to my spouse. If not to my spouse, then to my kids in equal shares.” That’s not the hard part. The hard part is in the details of our specific lives. Part of what we do with Estate Planning is to make sure people know what to look for when the time comes and where to find it.

Mistake #5 – “My statements and emails are all my family needs.”

While statements and emails may provide a lot of information, the problem is in how your family will access your emails and statements. More and more people are using online, paperless statements that require a log-in. Additionally, your family would need a password to log-in to your email. So, part of Estate Planning also involves detailing what those assets are, where to look for them, and how to access those assets when you die.

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