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Estate Planning Doesn't Have to be a Black Hole (Five Biggest Mistakes)

You should feel good about having all of your affairs in place so that in the event of your death, there are fewer worries for the loved ones left behind. Planning provides peace of mind and protection for everyone affected. However, when it comes to estate planning, mistakes can happen. And when they do, it can ruin the financial legacy you intended to leave behind. Here are five of the biggest estate planning mistakes you do not want to make:

Outdated Documents

Estate planning documents, including beneficiary forms, should be reviewed regularly. Family dynamics change. Every year there are people born into the family, and people die within the family. Some of these deaths could be people you originally penned as beneficiaries years ago. There is also the reality of divorces as well as marriages and relocations. These things happen, and the last thing we think to do is to update the necessary documents that would impact so many upon our death.

A good practice is to update your will every three to five years, along with beneficiary forms, and other important legal documents.

Not Understanding How Assets Are Passed On

Wills and trusts are important for passing on real estate and other property you own. This does not include assets left behind like life insurance and retirement accounts. Wills or trusts have no directive over these items because beneficiaries are selected with these types of accounts. Don’t assume that your will or trusts will override beneficiaries that have been determined for these types of assets. This is the importance of reviewing all documents — to ensure they all say exactly what you want them to say and the proper inheritances are going to the right individuals.

Adding People to Your Bank Accounts

It’s understandable as we get older that we may need someone to help us oversee our finances. There are smart ways of doing this and not so smart ways of doing this. The smart way is to appoint an agent using a Durable Power of Attorney and give them the legal authority to manage your finances. You could also transfer your bank accounts to a revocable living trust and list that individual as the trustee or trust or co-trust along with you. The not-so-smart way is to add someone to your bank account. Adding someone to your bank account subjects your account to that person’s creditors. You’re also unintentionally giving that person ownership interest in your account.

Naming A Minor As a Beneficiary

A minor (under 18 years of age) is not allowed to receive a direct inheritance. And even when they turn 18 years old, there should still be concerns about their ability to handle anything left to them. They could mishandle your inheritance and be left with nothing. Instead, a minor’s inheritance needs to be left in a trust. This way, you can specifically name the person to manage the funds on the minor’s behalf and ensure the funds, property, etc. are being handled appropriately. Then when the child turns a certain age, of which you will dictate the terms (with any stipulations you choose), the remainder of the inheritance will be turned over directly to them. It’s recommended to appoint an independent trustee to manage the inheritance. This is someone who is not related to you or the minor and has no legitimate interest in the estate.

Forgetting About Digital Assets

These days, most of us have digital accounts, from social media accounts (Facebook, LinkedIn, Instagram, etc.) to online banking, to email accounts, and more. Digital estate planning is new but in the technological age we’re currently in, it’s understandable. You can control what happens to all of your social media platforms when you die. You can create your own plan or name a Digital Executor who can ensure all your digital assets will be handled appropriately.


The worst thing you could do is fail to plan at all. We get it…this type of planning is not fun to do. Most of us don’t like to think about our death, but the truth of the matter is, none of us will live forever. A recent survey conducted by shares that most Americans do not have a will. Less than half of Americans have any estate planning documents at all. The consequences of dying without legal plans in place can be detrimental and could leave the court system or other entities unbeknownst to you to decide how to best handle your assets. That could end up being a lose-lose situation for everyone involved.

At JDH Wealth, we help families with tough decisions when it comes to financial planning and tax and estate planning. Our clients benefit from advisors who have the expertise to answer their planning questions and even questions on taxes when it comes to their estate. Don’t procrastinate! Make the decision today to start planning for your family’s future. If we can you help you in this process or if you just need a second opinion, don’t hesitate to reach out to our team.


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