Seven Common Estate Planning Mistakes

Image of gasping man. Photo by krakenimages on Unsplash.

1.  Not Making an Estate Plan.

If you have not created an estate plan, the State of California has one for you. It’s called intestacy, and it may not reflect your wishes and will require your loved ones to open a probate case in court. Estate planning is a gift that you give your loved ones. After your death, your loved ones may be hurting. It will be easier for them if you have left them a complete, valid estate plan.


2.  Not Updating Your Existing Plan.

Life changes. Keeping your documents current is important. If your documents name individuals who are no longer a part of your life, or if they do not fit your current financial status or current laws, you will need to update them so that they meet your goals and reflect your wishes. Many people choose to update their estate plan after marriage or divorce, birth or death of a loved one or significant changes in their financial status.


3.  Failing to Put Assets Into Your Revocable Trust.

If you do not transfer assets into your Trust, the Trust may fail (meaning that the terms of it will not be honored.) Those assets left outside of your Trust may not be subject to the oversight and management of your named Trustee and may not pass according to your distribution plan in your Trust. At the very least, your loved ones will need to petition the probate court to put your assets into your Trust.


4.  Not Signing Your Original Documents.

Your documents are not effective until you properly sign them. If you are sure how to properly sign them, see our signing table. Once they have been properly signed, store them in a safe place.


5.  Trying to Change an Irrevocable Trust.

Some Trusts with more than one Settlor (the people who create the Trust) become irrevocable when the first Settlor dies. Many married couples make one Trust for the both of them and decide that the Trust cannot be changed after the first spouse dies. In this case, the surviving spouse cannot legally change the Trust, but some try. After the surviving spouse’s death, it becomes very difficult for their loved ones to unravel the illegal changes.


6.  Writing On Your Original Documents.

It is important to treat your original documents appropriately. Do not make changes directly on the originals. If you want to edit your documents, copy the originals and write on the copies. Then get new documents that incorporate your changes. Handwritten changes on your original documents may not be honored and may be seen as an attempt to void your documents.


7.  Not Knowing What You Have.

Review your documents annually. If after reviewing them, you realize that they are not appropriate for you at this point in your life, make new documents that reflect your current wishes and your current financial situation.