7 Common Estate Planning Mistakes to Avoid

Estate planning may not be as easy as jotting down your wishes on a bar napkin, but it can be done safely and quickly with a little guidance.  Here are seven common estate planning mistakes to avoid, and why they matter.  

1. Forgetting to destroy copies of any previous wills created.  This can cause legal battles (and long ones at that), as heirs/beneficiaries discover multiple wills and argue over which one is valid.

2. Creating wills after health decline.  Creating a will document or living trust after you have been diagnosed with dementia, Alzheimer’s or other severe mental incapacity can cause problems of validity.  Even wills created in the early stages of a disease are sometimes challenged in court (usually by someone who feels slighted and is looking for more inheritance).  This is one good reason why even young, healthy people should be proactive in creating their last will document while able-bodied, and updating it as their assets and family continues to change and evolve.

3. Choosing a trustee or executor hastily or out of guilt. The person you choose should be someone you trust wholeheartedly to carry out your wishes. It should also be someone fair and impartial, who is preferably not a beneficiary.

4. Outrageous bequests.  Unreasonable or too-strange bequests are often challenged in court, such as leaving all assets to a pet dog.  Nasty legal battles ensue, as anyone who feels they have a “legitimate” claim to your money will come out of the woodwork to try and “secure what’s rightfully theirs.”  Leona Helmsley was one such famous legal battle.

Common Estate Planning Mistakes5. Intentional omissions of spouse or children.  Most every state has minimum requirements for what proportion of your estate is left for a spouse; this is called “right to election”.  While you can try to leave a spouse out or provide for less than the minimum requirements (usually between a third and half of your estate), it will generally not hold up in court if challenged.  Even though James Brown’s will stated “If he failed to provide for any relatives, such failure is intentional and not occasioned by accident or mistake”, it left the family able to challenge this as it was not consistent with the laws of the land.  Thus his relatives ended up being awarded half of his fortune anyway, despite his wishes.

6. Invalid or illegal signatures on a will.  It is critically important to make sure that a last will document is signed and witnessed properly.  Wills in most states need at least one witness, and many must be notarized.  Further, most states will not recognize a beneficiary as a witness.

7. Using a “holographic will”.  We’ve come full circle back to the bar napkin.  A holographic will or living trust is generally handwritten on, well, anything.  At one time these were considered legitimate and held up in many courts, but then again at one time courts used stocks and pillories to punish criminals.  Today only 25 states will even consider recognizing holographic wills or living trusts as valid, and even in those states, these documents are often contested.

Luckily for you, creating a valid living trust or last will document is not rocket science, provided you have guidance.  Our State Assist information will walk you through your state’s laws as you need them in the will wizard and living trust wizard, and we will include all necessary legal language for your state when generating your documents.

Related Reading:

How Is a Living Trust Different from a Will?

Glossary of Estate Planning Terms, from Probate to Power of Attorney

Intestate: How Dying without a Will Creates a Family Legal Nightmare