It can be difficult to put a value on a lifetime of accumulation — your money, your home, its furnishings, souvenirs from vacations, treasured gifts from your family. It’s a joy to collect these items over the years, but too few consider what will happen to it all when they’re no longer around.
From your life savings, to your digital assets, to what will happen to any beloved pets — all these things must be considered when estate planning. And while a qualified professional can help guide you through the process, there are still some mistakes people commonly make along the way.
As leaders in the financial space, the members of Kiplinger Advisor Collective have seen numerous mistakes made by well-intentioned people who maybe just didn’t have the right information at their disposal. So here, they discuss those common mistakes and the advice they would give instead to ensure the estate planning process is a smooth one for all involved.
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They forget to implement their estate plan
“One of the biggest mistakes people often make when it comes to estate planning is creating the estate planning documents but then forgetting about implementing their estate plan. It is important to create, implement and monitor your estate planning documents. As part of the estate planning process, be certain to inform your trusted loved ones with copies of your documents.” — Marguerita Cheng, Blue Ocean Global Wealth
They think they have plenty of time
“The biggest mistake people often make is thinking that dying happens to other people! They don't take their own mortality seriously, or they wait until it’s too late when it comes to their loved ones' planning needs. My advice would be to think about what plans you have in place for your legacy, give some thought to the importance of it and read some simple literature on the topic.” — Adrienne Rowles, Thrivent Investments
They neglect to set up a trust
“I would recommend that a client have a trust set up through an estate planning attorney because it can help them avoid the costs and delays of probate for their loved ones. In addition, a trust can ensure opportunities to provide specific assets to certain beneficiaries and could be a good way to mete out the money to children who are not financially responsible.” — Mario Hernandez, Longevity Wealth Management
Kiplinger Advisor Collective is the premier criteria-based professional organization for personal finance advisors, managers, and executives. Learn more >
They fail to create a deadline-driven checklist
“One big mistake I see is that people are not creating a checklist with deadlines for estate planning checkpoints. This is essential if they want to have a secure estate plan, and it creates peace of mind not only for the planner but for their beneficiaries as well. It’s essential for people to be deadline-driven when working on estate plans so they don’t end up postponing crucial steps.” — Angela Ruth, Due
They leave room for misinterpretation
“The biggest mistakes happen not in how the documents are written, but in how they are interpreted after the fact. In my opinion, the client has to have extensive in-depth conversations and an evident understanding with whomever will be appointed trustee or given any power of attorney. Titling can go a long way in alleviating misinterpretation of trust documents.” — Deborah W. Ellis, Cogent Independent Advisors, Inc.
They forget to distribute their personal property
“People forget about distributing their personal property, such as collections like art, coins, sports memorabilia, wine, jewelry, power tools, musical instruments and more. Even all the furniture and electronics can add up in value. Having a home inventory documenting this property, the value and a distribution list with specific family members or charities is an important part of an estate plan.” — John Bodrozic, HomeZada
They fall victim to their own inaction
“One mistake is when people don't have a will, power of attorney, guardians for underaged kids and more because they didn't complete or sign estate documents. Many smart, wealthy people have fallen victim to their own inaction, and families pay the price via taxes, legal fees, locked-up assets and public scrutiny. Don't let the final memory of a deceased family member be, ‘We could have avoided so much pain if only …’” — H. Adam Holt, Asset-Map
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The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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