Top 10 estate planning mistakes to avoid

An estate plan consists of various legal documents delegating your assets to your loved ones after you pass away. It is not just something for the ultra-wealthy to consider; people of all socioeconomic backgrounds should ensure they have put together or started an estate plan.

Estate planning is crucial as it ensures your assets are managed and distributed according to your wishes after death or in the event of incapacity. Without an estate plan, state laws and probate courts can decide what happens to your assets. This can lead to delays, high legal fees, unintended costs, and unnecessary stress.

A well-made estate plan can help:

• Financially protect loved ones
• Minimize taxes and legal fees
• Appoint guardians for minor children or pets
• Avoid family disputes
• Make healthcare and financial decisions clear if you are unable to

Our guide to estate planning, or estate planning for women, can help you get started with your estate plan.

Estate planning is not the easiest, or most exciting, task to do. There are many things to take into account when creating your estate plan, which can make it easy to overlook something.

This guide will help you avoid common estate planning mistakes and help to provide peace of mind that your wishes will be met after you pass away.

1. Not having an estate plan at all

One of the biggest estate planning mistakes is failing to make an estate plan or procrastinating on starting one. While estate planning seems like something you can put off, it is better to avoid risking the financial future of your estate and your legacy.

Estate planning can also help you in the event that you become incapacitated. It is better to plan ahead to avoid your legacy meeting the fate of the court. This can also protect your family and other loved ones and help them avoid unnecessary legal stress and extra costs.

2. Failing to regularly update your plan

If you already have an estate plan or are just getting started creating one, it is also crucial that you remember to update your plan. One of the common mistakes in estate planning is failing to return to your plan after making it.

Creating an estate plan is only one step of the equation. Major life events like marriage, divorce, births, deaths, or major financial changes should trigger updates in your plan. You should also consider the age of your children (if applicable), as they may now be an appropriate age to take on legal matters or finances compared to when you made your plan. If this is the case, they may no longer need guardians either, which would also need to be updated.

Furthermore, as your children grow older, you can take other aspects, such as financial maturity, into consideration in case you need to reevaluate who will get ownership of certain assets, accounts, and other important possessions.

You will also want to ensure your trustees, fiduciaries, executors, and others are up-to-date, as the ones you had initially listed could potentially be unavailable, no longer suitable for the position, retired, or even deceased. Ensure you have appointed someone you trust.

3. Overlooking your digital assets

Another common mistake in estate planning is overlooking your digital assets. While most people ensure they have a plan for what happens to their property, money, and other valuable possessions, it is easy to forget that your digital footprint also needs to be accounted for.

Digital assets include everything from your social media accounts to bank and cryptocurrency accounts. Failing to list your digital accounts, login info, cryptocurrency, or other important information can leave your accounts inaccessible or vulnerable to fraud.

You may also want to create a digital estate plan and reference it in your estate plan to give clear instructions on how you want your digital assets managed after you pass away. It is also important to note that while digital accounts are considered digital assets, any financial assets in these accounts are subject to different laws and regulations.

To further avoid estate planning pitfalls, you will also want to ensure your digital estate plan is up-to-date and follows any relevant laws.

4. Not naming contingent beneficiaries

Another estate planning mistake to avoid is naming only one beneficiary for your assets — or forgetting to update them. If your primary beneficiary is unavailable or deceased and no alternative is named, your asserts could go to probate. Having a contingent beneficiary, someone who is next in line to any given asset, could help you avoid this.

To ensure your assets are delegated to the right person, you can list a primary and one or more contingent beneficiaries. You will also want to periodically update your beneficiaries.

5. Ignoring tax implications

Estate, income, or inheritance tax liabilities can leave a big dent in your assets, reducing the value of what your heirs receive. As of 2025, if your estate is worth more than $13.99 million, it will be taxed at the federal level.

It is also important to consider state estate taxes, as these may vary. If you have moved states since you first created your estate plan, you may want to review estate tax regulations in your new state.

You can also seek professional advice to help you structure your estate plan and help eliminate the possibility of owing more taxes after you pass away. Being aware of gift and inheritance tax rules can also help your beneficiaries know what to expect after you pass away.

6. Forgetting to fund a living trust

Including a trust in your estate plan but improperly funding it is another common estate planning issue that can arise. Not transferring assets into your trust can render it ineffective and can result in probate.

Creating a trust is only the first step. Ensuring your assets end up in your trust even after death can ensure your assets reach the intended beneficiaries.

7. Choosing the wrong executor or trustee

Estate planning takes a lot of time and effort, which could be dismantled if you appoint the wrong executor. Choosing someone untrustworthy or incapable of managing complex financial and legal responsibilities can cause delays and disputes, which can be avoided.

Furthermore, if your chosen executor or trustee has a conflict of interest, this can lead to further problems when administering your estate. You may want to consider asking someone unbiased for permission before appointing them as your executor.

8. Not planning for incapacity

Becoming incapacitated may sound like something hypothetical that cannot be prepared for. While this may be partially true, you can stay one step ahead and avoid a common estate planning mistake by naming a durable power of attorney (for medical or financial matters) or a healthcare proxy. Consider choosing someone you trust, as they could be making important decisions regarding your healthcare or finances.

You might also want to waive your individual Healthcare Insurance Portability and Accountability Act (HIPAA) rights to your appointed power of attorney so they can make accurate healthcare decisions that work in your best interest. Failing to account for a power of attorney when estate planning can create problems in the event that you become incapacitated.

9. Failing to communicate with loved ones

Are your beneficiaries aware they are your beneficiaries? Do they know what assets will be passed on to them when you pass away, or who to contact in the event that something happens? Keeping relevant stakeholders in the loop will make things a lot smoother when the time comes.

Lack of transparency can lead to confusion, conflict, and even legal battles between family members and other loved ones after you pass away. To avoid this, you can consider writing an inventory or letter of instruction for your fiduciaries and children. This should include all your assets, relevant beneficiaries, names, addresses, and phone numbers of your estate planning team.

10. Assuming a will covers everything

While a will is a crucial part of your estate plan, you should also be aware of assets that require proper beneficiary designations — meaning naming a beneficiary in your will wouldn’t be enough. This is true for assets such as retirement accounts, including an IRA or 401(k), or life insurance accounts.

You should ensure you have appointed beneficiaries and contingent beneficiaries on those specific accounts. These should also be periodically updated to ensure the proper beneficiary is named and that they are also listed across other documents, like in your will.

Estate planning doesn’t end after signing the required documents. Marriage, divorce, death, births, children reaching adulthood, moving states, and other major life changes can cause your estate plan to become outdated. Being aware of top estate planning mistakes can help know what to avoid and what to come back to in your estate plan.

You can start drafting your estate plan as soon as you start accumulating assets. Even if you are just getting started or already have a fair share of assets to your name, Raisin is here to help. The Raisin marketplace gives you access to various savings products across multiple banks with competitive interest rates — all in one place! Start growing your wealth today.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.