7 Common Estate Planning Mistakes and How to Avoid Them

Estate planning is one of those tasks that should be towards the top of your to-do list, but often gets pushed to the bottom.

Costly estate planning mistakes often happen when people wait too long to get started. Even with good intentions, missing important details can cause problems later.

Below, we cover seven of the most common estate planning mistakes that people make. More importantly, we explain how to avoid them so you can protect your assets, family members, and legacy.

7 big estate planning mistakes

Many estate planning mistakes aren’t discovered until it’s too late to fix them. This can cause families extra stress, delays, and costs. Knowing about these common problems is the first step to avoiding them.

1 - Not having an estate plan at all

One of the most common mistakes is not having any plan at all.

A lot of people think estate planning is just for the wealthy or older adults, but it’s important for anyone who has assets, dependents, or personal wishes.

If you die without an estate plan, your estate is distributed according to intestacy laws. This means:

• You lose control over who inherits your assets

• The process can take longer and cost more

• Family members may face unnecessary stress or disputes

How to avoid it:

Even a basic estate plan is better than having nothing, and you can update it as your life changes. The key is to get started.

2 - Assuming a will is all you need

Wills are an important part of any estate plan, but thinking that they are all you need is a common mistake.

A will does not cover all your assets. Assets that do not pass through a will include:

• Retirement accounts, including pension funds

• Life insurance policies

• Assets held in trust

• Jointly owned property (in some cases)

A will does not include plans for illness or incapacity. For those situations, you need a Power of Attorney (POA). A POA handles financial, health care, and medical decisions if you cannot make them yourself.

How to avoid it:

Check all your assets along with your will. Make sure your beneficiary designations are current and match your overall estate plan. Know what your will covers and what it does not, so you can put the right steps in place.

3 - Not updating your estate plan

An estate plan isn’t something you do just once. Life changes can quickly make your plan outdated.

Most experts suggest reviewing your estate plan every few years. You should also review it after certain events, such as:

• Marriage or divorce

• Birth of children or grandchildren

• Death of a beneficiary or executor

• Big changes in assets

How to avoid it:

Letting your estate plan become outdated is a common mistake. Review your plan every three to five years, or sooner if you have major life events. Regular updates help make sure your wishes are clear and legally valid.

4 - Overlooking estate tax planning

If you don’t plan for taxes and administration costs, you could leave behind less than you intended. This is one of the costliest estate planning mistakes.

Poor planning can result in:

• Paying higher inheritance tax (IHT)

• Unnecessary probate costs

• Forced asset sales to cover liabilities

How to avoid it:

Plan with tax efficiency in mind. It’s important to make use of lifetime gifting strategies, trusts, and other tools to help reduce estate taxes.

5 - Not using trusts

Many people think trusts are only for the very wealthy, which is why not using trusts is another common estate planning mistake.

Trusts can help:

• Control how and when assets are distributed

• Protect vulnerable beneficiaries

• Reduce tax exposure in certain situations

• Avoid delays and costs associated with probate

How to avoid it:

Find out if a trust could benefit your estate plan. There are many types of trusts, but even a simple one can offer flexibility and protection.

6 - Not including digital assets

Digital assets are often forgotten entirely in an estate plan, making this one of the most modern estate planning mistakes.

Digital assets can include:

• Online bank or investment accounts

• Social media accounts

• Email and cloud storage accounts

• Cryptocurrencies and digital wallets

If you don’t leave instructions, your loved ones may have trouble accessing these assets or might not be able to access them at all.

How to avoid it:

Digital assets should form part of a comprehensive estate plan. Make a list of your digital accounts and provide clear instructions for accessing and managing them. Update this list regularly and keep it in a safe place.

7 - Taking a DIY approach

DIY tools and online templates can be helpful starting points, but relying on them entirely could be one of the biggest mistakes on this list.

Without expert guidance, it’s easy to overlook:

• Complex assets

• Tax considerations

• International assets and tax rules

How to avoid it:

Recognise when you need professional advice. An estate planning expert can spot risks, make sure your plan is legally binding, and create a plan that fits your needs.

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How to avoid common estate planning mistakes: a simple checklist

To help avoid common estate planning mistakes, keep these tips in mind:

• Create an estate plan as early as possible

• Understand which assets are covered by your will and which are not

• Review and update your plan regularly

• Consider tax efficiency and long-term costs

• Use trusts to protect and pass on your assets efficiently

• Remember to consider your digital assets as part of your estate planning

• Seek professional advice, especially when your situation is complex

Get estate planning right from the start

Estate planning mistakes are common, but you can prevent them. By being proactive and organised, you can protect your assets and loved ones and have peace of mind that your affairs are in order.

The most important things are to start early, review your plan regularly, and make sure it matches your assets and wishes. Talk to one of our estate planning specialists to get the advice and guidance you need to secure your legacy.