Toby Mathis, Esq. covers the four major estate planning mistakes to avoid to ensure your legacy.


Updated August 18, 2021

Estate planning is a field rife with misinformation. Whether you’re just starting to think about estate planning or have had a plan in place for years, everyone should avoid these four big estate and legacy planning mistakes.

Mistake #1: Doing Nothing

The first mistake to avoid in estate and legacy planning is not having a plan, or doing nothing. As much as we may want to play the ostrich and bury our heads in the sand when it comes to passing away, Father Time will win every time. Everyone will eventually pass on, and not having an estate plan will guarantee that your heirs are left with a mess — even if you pass with no assets.

Another significant consequence of not having an estate plan in place involves your future need for care. In addition to leaving your heirs with a mess upon your passing, not having a plan also means not having clear designations of your wishes if you ever need long-term care or something unfortunate happens. In that case, without an estate plan, your family will be forced to deal with state workers, guardianships, etc. to plan for your care.

Mistake #2: Thinking You’ll Live Forever

Like I said earlier: Father Time wins every time. You won’t live forever. Not having a plan in place does nothing to prevent everyone’s ultimate passing, but it does straddle the family members left with burdens of care and court proceedings.

After acknowledging the inevitability of passing, there are really three basic options when it comes to estate and legacy planning: a simple will, a living trust, and doing nothing. With a simple will, heirs will still have to go through probate and a court-appointed process. With a living trust, the court process can be avoided entirely. The worst option, as discussed above, is doing nothing.

Two of these three options necessitate going through a court process: wills and doing nothing. Of course, doing nothing is worse. You want to make sure you have something in writing. Realistically, the best way to put your wishes into writing is by forming a living trust because it encompasses everything and avoids court entirely. If using a will, make sure to, at the very, least include ancillary items, such as a schedule of gifts, to avoid as much conflict as possible.

Mistake #3: Neglecting to Update Your Plan

Life happens. While you may have drawn up an estate plan that worked perfectly for you in your early forties, is that plan going to remain relevant for ten, twenty, thirty-plus years?

A common mistake I see with clients (and one with which I have personal experience) is neglecting to update your estate planning documents when major life changes occur. Not updating these documents can have significant unintended consequences, including accidentally disinheriting family members. Unfortunately, this is a mistake I’ve seen happen quite often.

In this day and age, mixed family planning is incredibly common. Second (or third) marriages with children from previous marriages are also common. Consequently, updating your estate plan is crucial to ensuring what you’d like to happen actually happens upon your passing. Without keeping these documents updated when major life events occur, you could inadvertently disinherit someone important.

Mistake #4: Missing the Big Picture

There is a bigger picture when it comes to estate planning — what I like to call legacy planning. Failing to plan for your legacy instead of just your death is another huge mistake in this field.

Again and again, statistics show that recipients of large sums of money (“windfall” money) for which they did not work will have approximately 16% of that windfall after five years. Put simply: on average, recipients of large sums will burn through 84% of the money in less than five years. Furthermore, the bankruptcy rates skyrocket in populations who receive windfall money — this is especially true for lottery winners. Of course, we don’t want to curse our heirs by giving them a large lump sum or highly-valuable asset if they’re not prepared.

To my clients (and everyone), I always recommend thinking more about the big picture. Create a 200- or 300-year legacy plan for yourself and your family. What’s important to you? Fill in the blank: I think that __________________ is really important, so I’m going to create a legacy that fosters that in my descendants or for future generations.

For instance, if you value education, you could create a living trust for your kids, grandkids, and further descendants to go to college, with specific stipulations for how that money can be used and allocated. Instead of just leaving your kids windfall money, you could create a legacy that values education for the future of your family. If you put the right things in place now, you have the opportunity to affect lives long after you’re gone — for decades, or even centuries.

When you’re ready to begin planning your legacy, reach out to our knowledgeable and caring team of professional advisors here or 800.706.4741.


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