Please find below 5 of the most common mistakes I have witnessed in guiding individuals and families through planning their estate. This list is not exhaustive, but does represent the majority of common errors.
1. Failure to update beneficiary information
When new estate documents are signed or current documents are updated, the attorney should provide recommendations on how all beneficiary designations should be made. Assets with beneficiary designations include: IRAs, 401k, 403b, life insurance, and annuities. You must contact your provider to obtain a beneficiary update form. For example, if your life insurance policy is through One America, you need to contact One America to obtain their beneficiary change form to sign and return. In many cases this can be done online using your unique login and password credentials. The important point here is the attorney's office will not do this for you, it is your responsibility to complete this follow-up.
2. Failure to fund trusts
If your attorney recommends the establishment of a trust, then the trust must own assets in order to function as intended. I have seen many estates in which trust documents were drafted and signed, but ownership of assets was never transferred to the trust thereby, rendering the trust documents useless. Again, the attorney's office will not do this for you and you need to own the follow-up to make sure this gets done.
3. Not taking time to review draft documents
Attorneys and attorney assistants are human and do make errors. Most attorneys use their own "standard" document for drafting estate documents. The legal assistant adds or plugs in your information. The attorney then adds to or removes sections of their "standard" document for your unique situation. Mistakes are rare, but they are common enough that your careful reading and review of the draft documents is important. Ask questions about whatever language you do not understand. The documents need to be as accurate as possible when you sit down to sign them.
4. Not informing heirs of your estate plan
In many families, discussing money is taboo and unfortunately many children have no idea what their parent's estate documents say. Adult children may make decisions based on what they think the documents say, only to be surprised when they actually find out. If it is appropriate for the family relationships involved, it can be good to have a "family reading" of the estate documents. This gives everyone involved a chance to hear what is in your estate plan and ask questions. It is better to do this when you can explain your desires and intent rather than have the children/heirs guess what your intent was when you signed the documents. This is also a great way to explain any charitable bequests you are making, and why you are making them. This will help pass on your intended legacy to the next generation.
5. Failure to name people for contingent and 2nd contingent responsibilities.
The people you name in your estate documents to perform various duties also need to have "back-ups" and even a "back-up to the back-up". For example, if you name someone to take care of your minor children, also called a guardian, you would want to name a contingent guardian to take care of your children if the first person you name cannot. Likewise, it is good practice to name a 2nd contingent guardian as a "back-up to the back-up". Life situations never turn out as we think they might. You never know what might be going on in the life of the person you name that makes them think twice about performing the duty you have named them to perform. Having 2nd and 3rd people named provides assurance that someone you want will perform the job. Naming people for contingent and 2nd contingent responsibilities are needed for personal representative (or executor), guardian of minor children, trustee of a trust, durable power of attorney, and health care power of attorney.