The Biggest Estate Planning Mistake You Don’t Want to Make
The Biggest Estate Planning Mistake You Don’t Want to Make
Estate planning is designed to give you peace of mind, ensuring that your loved ones are taken care of and that your wishes are honored after your passing. However, one common mistake can derail even the most well-thought-out estate plan: failing to fund your trust properly or update your documents after major life changes.
This mistake can result in delays, unnecessary costs, and legal disputes—exactly what estate planning is supposed to prevent.
Why This Mistake Happens
Many people assume that once they sign their will or trust, they’ve completed their estate planning. But an estate plan is only as effective as its execution. If you set up a trust but don’t transfer assets into it, those assets may still go through probate—defeating the purpose of having a trust in the first place.
Similarly, life events such as marriage, divorce, the birth of a child, or the sale of an asset can change your original plans, making old documents ineffective.
Common Estate Planning Pitfalls
1. Failing to Fund a Trust Properly
A trust is a powerful estate planning tool, but it doesn’t automatically control your assets unless they are properly transferred into it. If you establish a trust but don’t formally re-title your assets under its name, those assets may still be subject to probate.
✔ Solution: Work with an attorney to ensure your real estate, bank accounts, and investments are properly titled in the name of the trust.
2. Not Updating Estate Documents After Major Life Changes
Your estate plan should evolve as your life does. If you get married, divorced, have children, or experience a significant financial shift, your estate plan should reflect those changes.
✔ Solution: Review your estate plan at least once a year or whenever a major life event occurs.
3. Relying Solely on a Will Without Additional Protections
A will alone may not be enough to protect your estate from probate, taxes, and potential disputes. In many cases, a trust, power of attorney, and healthcare directives are necessary for comprehensive estate planning.
✔ Solution: Consult with an estate planning attorney to determine whether a will or trust best suits your needs.
The Best Way to Avoid Estate Planning Mistakes
The best way to ensure your estate plan works when it’s needed is to regularly review and update it. At Mehaffey and Watson, we help clients avoid common pitfalls and create legally sound estate plans that truly protect their families.
If it’s been a while since you reviewed your estate plan—or if you’re unsure whether your assets are properly titled—contact us today for a consultation.
